In our current market, I get a lot of questions about short sales. And no wonder! As of Monday one out of every 5 listings in the Greater Las Vegas MLS was a short sale! For those of you that are terminally curious, that’s over 4000 short sale homes.

If you are interested in purchasing a short sale home, this is a must read article from Real Estate Journal. Here’s some of the important bits:

Even with experienced people at your side, it pays to arm yourself with facts before you make an offer. Don’t assume that the house is a bargain, since the owner may have bought the house at the peak of the housing cycle and may owe so much that he can only discount it to current market prices. Find out what comparable houses are selling for, whether a foreclosure notice has been filed for the property, who owns the loan or loans, and how much is owed — you’ll have to deal with them all.

The seller may eagerly accept your offer, but he isn’t the final arbiter of the deal — the note holders are. So make your offer contingent on the acceptance of the lender or lenders. Since the lenders want to know that you can back up your offer, include as much information as you can on your financial resources, as well as a preapproval letter from a lender.

Although the property may be advertised as-is, make sure the deal gives you the right to have and approve home and pest inspections by qualified professionals. Short sellers usually have given up maintaining and repairing their homes; you need to know what other expenses to expect.

Also, place a time limit on your offer — ask your agent what is customary in your area –since lenders will sometimes drag their feet, hoping to get a better deal. Short sales rarely take a short time to complete, but you shouldn’t have to wait around forever.

It’s a tough deal; even though roughly 20% of our listings are short sales, only about 5% of our actual sold homes last month were short sales! The frustrations involved in short sales are so universal that my office has prepared a document specifically for our clients on what to expect. If you would like to receive more information, click the “Contact Me!” button in the sidebar, or call me at the phone number at the top of this page.

This entry was posted on February 15, 2008 at 10:09 am. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Posted in Distressed Property by Bridget Magnus Comments Off