You’ve found a home worth purchasing and its a short sale. Now its time to ask a few questions, but not just about the home. You’ll need to ask questions about everyone involved in the transaction including yourself to make sure moving forward is the right move.
You’ll want to ask questions to (or about) the following:
- YOU (YES YOU)
- Your agent
- Listing agent
- Home owner
- Banks involved
Questions for You: The Self Analysis
Bank Owned: You want the smoking deal and you’re willing to do some repairs and deal with some paperwork nonsense from the bank.
Traditional: You think the headache involved with fixing a bank owned home and messing around with a short sale is for the birds and you’re happy paying a premium to skip to the front of the line.
Short Sales: You don’t have enough stress in your life and you’re wondering what it would be like to turn into a basket case for 3 to 6 months while you wait for a response from the bank or banks if more than one is involved. But you’ll get a great deal and hopefully a home that’s in better condition than the foreclosure.
Questions to Ask Yourself
- Am I willing to sit for a minimum of 3 months to as long as 9 months to wait for a response from the banks?
- Will I be alright if the banks reject my offer and want me to pay more money?
- What will I do if the deal falls apart in three months and I have to start looking all over again?
- Will I feel comfortable not looking for more homes and not putting in more offers while I wait?
- How much am I truly willing to pay for this home?
- Am I okay not being able to lock my rate or give notice to vacate my current residence with any
Reality Check Points
- If you offer far below market value for the home, the banks will want you to pay more for the home; submit a realistic offer when attempting to purchase a short sale
- 95% of the time the bank’s approved price is a very good price
- Writing offers on subsequent homes is a material fact and needs to be disclosed to the Seller. Sellers aren’t willing to look at offers that buyers cannot complete and therefore, your subsequent offer isn’t going to be accepted
Buying a short sale can be a tough process, emotionally draining, frustrating and may not be worth the hassle. With the right frame of mind it can be a simple transaction that just takes longer and will involve a few changes before everything is approved. Short Sales aren’t for everyone, they may be a great deal, but it might not be in suitable for everyone.
This is the first to a multiple part series on questions to ask before purchasing a property in a short sale situation.
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