What to know before buying a short sale

House hunters might see a short sale they believe is a good deal and immediately want to jump into the purchase phase. While there’s nothing particularly wrong with this, short sales are different than traditional sales and come with their own set of advantages and disadvantages. A short sale may present a prime opportunity for some buyers. For others, not so much. Read on to learn valuable tips that may help you determine if buying a short sale is right for you.

First, what is a short sale?
A successful short sale means the seller’s lender is willing to accept a discounted payoff to release an existing mortgage.  Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.

Get a pro on your side
Hire an agent experienced with short sales. It’s one strike against you if the listing agent has never handled a short sale, but as a buyer, it’s crucial to hire an agent who knows the ins and outs of the short sale process. Experienced agents can anticipate surprises and stop problems from happening.

Loan approval
Before a lender will consider your offer they will want to see that you have your own loan available and you are preapproved. Have a current preapproval letter for the lender, dated within the last 30 days. It will help if your agent sends a list of comparable sales that support the price you are offering to pay for the home.

Be patient
While the price of a short sale may be appealing, the buying process can be long. To help expedite, you can make your offer contingent upon the lender’s acceptance. Give the lender a time frame in which to respond, after which, you will be free to cancel. Some lenders submit short sales to the committee, but most can make a decision within two weeks to three months.

Think you might be interested in checking out short sale options in the Denver area? Give Metrowest a shout – one of our experienced agents would love to help you start the process!

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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