With the recent jump in short sales here in the Salem Oregon metro real estate market, it seems like a good time to talk about what they are and aren’t. There are several homes listed on the WVMLS now as short sale attempts, but what is the process for a successful short sale?
Sellers need to know that they are not easy transactions and not everyone will qualify for a short sale. Just because you, as a seller, want one, it does not mean that you are qualified to get one.
First, you need to sit down with your agent and get as much of the short sale packet together as possible. Going through this information with your agent will clearly show whether or not you have a chance of getting a short sale with a lender or not. Like I said, just because you want one doesn’t mean you will get one. You have to qualify for one. Make sure you have a chance to qualify before trying a short sale. It makes no sense to put yourself through the stress of a short sale if you will get rejected at the end.
Next, you need to find a buyer. Now most lenders do not do pre-approved short sale amounts. Sometimes, especially with the small and local lenders, listing agents are able to pre-negotiate an approved short sale price, but most lenders want to see a contract first. So that means…finding a buyer. Bargain hunters are looking for short sale deals all of the time. If you price your home in line with the rest of the market, you won’t get an offer. You need to be priced below comparable homes to draw in an offer.
Once a buyer is found the offer along with all of the other documents of the short sale packet are submitted to the loss mitigator for the lender. Sellers need to understand that if more than one lender is involved or PMI is involved this process if much more complicated than if just one lender holds the mortgage deed.
The next step is to wait. Loss mitigators have tons of short sale requests so it will take some time to get to yours. You will know things are moving forward when they order an appraisal or BPO (broker price opinion). This one document is crucial to the lender because it will help to determine how much of a loss they are taking on the property. It has to be worth the lender’s time to take the loss on the home versus heading to foreclosure.
At this point, the lender will accept, reject, or yes…counter-offer the short sale. Since the lender is the one taking the loss instead of the seller, they have the final say about whether or not it makes sense for them to do so. It is not uncommon for them to counter-offer so at that point the buyer has to decide if they want the house or not.
Oftentimes buyers decide they can’t wait any longer and revoke their offer. Short sales are not for the impatient and need a buyer with the right temperament. Sellers can also get weary of the process: these are not for the faint of heart.
If you want more information about short sales, or want to talk to someone about whether or not a short sale makes sense for you, contact me at 503-371-6515 or email me at firstname.lastname@example.org.