June 19, 2008
First-Hand Advice on Short Sales from Redfin Forums
There’s a juicy conversation about short sales on Redfin’s Bay Area Forums, from the rare bird who successfully completed a short sale (which is when you buy a home for less than what is owed on the mortgage, requiring bank approval) in Pittsburg, California. He explains what it takes to win:
- Be promiscuous: I think most importantly, don’t come in expecting to get your first choice. Or your second. Or even your third. We made offers on four houses and were preparing to make an offer on a fifth when the third one finally came though. It’s kinda hit or miss with the banks, which are inundated with foreclosures and short sales…
- Don’t expect the pick of the litter: I had to change my mindset away from finding “the perfect house” to finding “a house we could live in” and then making offers on several houses before we finally got one.
- You don’t have a deal ’til the bank gets an appraisal: We made an offer (at the asking price), the bank then had the property “appraised” and counter offered, then we increased our offer $10k, and that was accepted after a few weeks.
- How long it takes depends a lot on the lender: I believe that different lenders are getting slammed with these short sales at different rates, and some banks are better equipped to deal with short sales than others.
Not earth-shattering rocket science, and we would suggest you could save yourself some time on all those offers by checking out how many banks have to approve the deal and how long they have to do it before the foreclosure auction — but for all the talk about short sales, someone who has actually closed on one is sometimes hard to find.
Tina Merritt said:
Great post from a consumer perspective. Most agents and buyers just don’t understand that a short sale is an entirely different real estate transaction. The bank only cares about their bottom line - not whether the buyer is “really nice”. Depending on the bank, it can be a very long, involved process to get a short sale approved. I recommend using an agent who KNOWS what a short sale is and how to handle it. Most experienced agents leave the short sale negotiating to either an attorney or a short sale service.
June 19, 2008 8:15 PM
Mark Harvey said:
Hi Glenn,
My question has nothing to do with Real Estate but I was listening to a podcast presentation called “How to make the most out of a start-up”. I was initially appalled at the dull reaction from the audience, however I am from Jamaica where we are hungry for knowledge.
I was wondering if you could answer 2 questions for me?
1- I am trying to launch a community-centric company that I know can revolutionize business - customer relationships by making the product an experience. www.destinative.com, how do I get get the attention of venture capitalist?
2 - You would make a wonderful mentor, what advice would you give someone who has only been in the country for 10 year, who doesn’t have a vast network of friends (I have joined local organizations) about finding a mentor?
Thank you.
Mark-
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July 11, 2008 12:47 PM
Jon Christopher said:
It’s a little more complicated than it has been made out to seem but it isn’t difficult to short sale. Especially in this market, lenders have thrown in the towel. To follow up, you don’t have a deal until you get an approval letter. I could go on and on. More info at http://www.shortsaleway.com
July 22, 2008 4:57 PM