Short Sale approvals are mysterious.  Banks often take months and months to just gather information while everyone involved waits anxiously for any contact.  The short sale market has increased in Jacksonville Florida as most homes that are selling are typically either short sales or bank owned properties.  Straight from our Buyer's Agents: "Most buyers want a short sale so they can get a better deal".

It looks like short sales will be around for much time to come, so the key is to work towards making them better....faster!  If you are another agent reading this or a home buyer, here are some easy steps to getting your Short Sale approved:

8 Steps to Fast Short Sale Approvals:

  1. Realistic Offer Price: Your offer should be in line with the market price.  Banks aren't willing to give it away.  If you want to roll the dice, go to the auction at the court house and bid on those houses.  Short Sales are different, they are still owned by the seller and are usually in good condition....unlike most auction houses.  Banks are willing to agree to a short sale if the offer price is within the market range for the house.
  2. Pre-Approval Letter: Forget a Pre-qualified letter, they are worthless.  Pre-Approval is proof that you have actually filled out a loan application and provided some documentation to your bank or mortgage professional.  Get the letter before you even look at a house, otherwise you are wasting your time.  As the sellers agent, I won't accept a contract without a pre-approval letter and most other seller agents won't either.  They also have to be submitted with all paperwork to the sellers it's required.
  3. Know your price range: If you can afford is $200,000 and have a pre-approval stating such, don't make an offer on a $250,000 home for $200,000.  If the sellers actually take the offer and submit to the bank, you may wait 60-90 days just to find out the bank will take $240,000 and not a penny less.  Instead, find homes within your price range.
  4. Understand you may be asked to raise your price: The banks often come back with counter offers.  Sometimes its a couple of thousand and sometimes its $10,000+.  Understand and be willing to adjust your price if their request is reasonable.  Erase all master negotiator thoughts of "this is our price and that's it" or "they should be glad they are even getting an offer" or "they should take our offer before they get nothing and the house ends up foreclosed".  The banks don't care about your reasoning, they have a  process to determining value and they stick with it.
  5. AS IS: Do not ask for repairs.  Banks want easy contracts.  You are buying it AS-IS with no repairs to be completed by seller.  If the house needs routine maintenance, you will be doing that yourself.  If the house needs substantial repairs, find a contractor - get a bid - submit it with your offer.
  6. Binder Deposit: Put up a binder deposit with the offer.  How much?  How bad do you want the house?  Sellers and banks want to see that you are serious....put up as much as you can.
  7. Be FAST with all request: Most banks now have additional amendments to add and modify the original contract.  they are all boilerplate type amendments.  Sign your side as fast as to not hold up the process.
  8. Work with Professional Short Sale Real Estate Agents: It's tough to not choose your buddy, your neighbor, or your bosses wife, but if you are buying a Short Sale - work with a full time REALTOR who has successfully completed short sales.  The training for Short Sales is not good at best.  It's better to be skeptical and search out an agent that knows what they are doing.
Posted by Brad Officer on
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