Atlanta Short Sale and Foreclosure Information Part 5

Buying a Short Sale Home

Considering today’s market along with the tremendous growth in the number of short sale properties available, the potential for buyer’s to obtain a “Bargain Deal” has increased substantially. Of course the baggage that comes with the increased opportunities provided by short sale properties is that buyers must be in a position to wait for lender approval among other things to close. The process can often take up to 4 to 5 months and I have heard of some transactions taking over 9 months. Buyer’s should also understand that the seller probably did not have funds to maintain the property and it is almost a certainty that the property will be sold “as-is” without any repairs being made.

What Short Sale Buyers Need To Be Prepared For

Prior to entering into a purchase and sale agreement for a short sale property, buyer’s need to have a full understanding of the process along with a knowledge of what is expected of them. Let’s examine what is expected of the buyer’s:

•    Prequalification For A Loan – The lender is going to want to see that the buyer has been completely prequalified by a reputable lender who has examined the buyers credit file with all three reporting agencies in addition to examining the buyers income and debt ratios
•    Realistic Expectations of the Time Frame – There is no set time frame in which a short sale transaction can be closed. One of the largest factors is how well did the listing agent prepare the short sale package for the seller’s lender. This is totally out of the buyer’s control and presents a real source of frustration. As stated earlier, the process can take 4 to 5 months.
•    Flexibility of a Closing Date – If a buyer is on a very strict time frame, such as an apartment lease coming to conclusion, a short sale is probably not the avenue a buyer in this situation would want to pursue. The time frames will almost certainly change and there can be multiple closing date extensions to the contract.
•    Resources to Make Necessary Repairs – Considering that the seller has experienced a financial hardship of some kind it only makes sense that they were probably unable to maintain the home. To help identify what potential problems there may be, make certain that you have a home inspection by a qualified home inspector.
•    The Lender Makes the Final Call – Buyers of short sale properties must understand that even though they have reached an agreement with the seller, it is the seller’s lender or, in some cases, lenders who will make the final call. It is possible for one lender to approve the transaction and the other not to approve it thereby starting the negotiation all over.
•    The Sale Can Fall Through – Through no fault of the buyer or the seller the sale of the property can fall through. As earlier stated, the lender has the final say as to whether or not they will approve the short sale.
•    Interest Rates Change – Interest rates change on a daily basis. In times of a more volatile market they can even change several times in a single day. When a contract is entered into a buyer may be expecting one interest rate and by the time the sale closes a different rate may prevail. Currently interest rates are at historic lows and the market is not volatile. This means that interest rates are remaining constant. I just wanted to share that the potential exists for interest rate fluctuation due to the amount of time that lapses between when the contract was entered into and the time it closes.
•    Knowledge of Who You Are Dealing With – For those of us who have successfully closed short sale transactions, we have a pretty good idea of what to expect from the various lenders. RE/MAX Chairman and CEO Dave Liniger took it upon himself to help educate some of the powers that be as can be witnessed in this article.

As your Atlanta Short Sale Buyers Agent there are several tasks that will be performed for you. You will get a complete market analysis of the property and the comparable properties in close proximity. In order to best determine how good a job the listing agent has done we will ask several questions:

1.    Is the short sale package ready for submission to the lender? If the agent is not familiar with what needs to be included in this package the chances for the property ever closing as a short sale are extremely low.
2.    How many liens are on the property? The more liens the more difficult it is to get everyone to agree and approve the short sale.
3.    If more than 1 lien, what are they? (a first mortgage, a second mortgage, a tax lien, a mechanics lien, etc.)
4.    What is the plan to satisfy the lien holders? There needs to be a satisfactory plan in place or we could just be spinning our wheels.

Finding a deal in today’s Greater Atlanta Market on a short sale property is easy. Following it through to conclusion is a talent. Why don’t we put my talent together with your desire to obtain a fantastic deal?

Whether you are interested in a Short Sale or a Foreclosure having proper buyer representation is to your advantage. Here is what one of my clients had to say about her experience:

I wanted to say thank you once again for making my house buying experience an exceptional one.  The care, time, patience and effort you took to ensure that I was satisfied with my purcase was exemplory. I have heard stories about the things other agents do and was very sceptical until I realise that you are the “REAL DEAL“..  You went above and beyond the call of duty to ensure that I had all the information necessary and that I would be aware of what to do and not to do!  Thanks Mack!  You were right…..when you are with Mack, get ready to pack!

Sheryl Clarke