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. This will be a multi-part post starting with the questions you need to ask the person in the mirror.
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 months while you wait for a response from the banks. But you’ll get a great deal.
5 Questions to Ask Yourself
- Am I willing to sit for 3 months and 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?
Reality Check Points
- The home will most likely be approved in 90 days and you won’t have to start over
- 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
- 95% of the time the bank’s approved price is a very good price
- Writing offers on subsequent homes is a material fact to all your offers and needs to be disclosed to the Seller, who will cancel the contract
Buying a short sale can be a tough process, emotionally draining, frustrating and just not worth the hassle. Or 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 your DNA to deal with the entire process.
This is part 1 in the series: 40 Questions You Need to Ask When Considering a Short Sale
If you’re looking for the list of questions we use to start qualifying a short sale, I’ve included it here:
- Questions for Your Agent: Veteran or Newbie?
- Question for the Listing Agent: Pro or No?
- Questions for the Home Owner: Is a Short Sale Realistic?
- Questions for the Banks: Will You Play Nice?
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