5 Short-Sale Tactics That Never Work
Save Yourself A Headache... or 10
Short-sales are in high demand. Home buyers are aware of the potential savings a short-sale offers and they are making offers—lots of them. However, as a real estate agent I have watched offer after offer get tossed in the trash because the lenders don’t have time to play games. If you want to save yourself a few headaches, take a look at this article before you make these same mistakes.
Wear ‘Em Down Until They Give In
Banks and mortgage companies are overwhelmed with short-sales, foreclosures, and loan modifications. Incessant calls and emails are one guaranteed tactic that will ensure your offer gets moved to the bottom of the pile. No one likes to be harassed and I can promise you this won’t work.
Reality Check: Have patience. If you don’t have time to wait then drop the idea of buying a short-sale. You’re not a candidate.
Make Ridiculous Low-ball Offers Until Someone Bites
Frankly, that ship has sailed. That’s not to say that you cannot get a deal when purchasing a short-sale home. However, EVERYBODY AND THEIR DOG is looking for a short-sale bargain and most of them attract multiple offers. The banks are aware of this and often hold and collect offers until they have several to choose from. Then they hand pick the best offer. Consequently, the ridiculous low-ball offers are rarely even considered. There’s just too much competition.
Besides the competition all short-sales are subject to an appraisal or Broker’s Price Opinion (BPO). If your offer is WAY below this assessed value, forget it. Seriously, forget it. Not gonna happen. Nagonnahappa. Please, step away from the short-sale before someone gets hurt.
Reality Check: Save everyone time and energy by making a reasonable offer.
Get The Bank To Perform Repairs and Updates
Banks are not in the business of handyman work or remodeling. Remember, a short-sale is NOT a bank-owned property. Repairs would have to be done by the home owner. If they are selling the home for less than it is worth, do you think they have the money to do repairs? Probably not.
Although there may be a few exceptions, you need to plan on doing any necessary repairs yourself. You will be able to get the home inspected and determine if it is worth the sweat equity. You can also make an offer reflective of the home’s condition. Keep in mind, also, there are loan programs available that may be able to help provide money for repairs.
Reality Check: Short-sales are bought and sold, AS-IS.
Pursuing A Short-Sale Without Good Credit
Statistics show the largest percentage of homeowners selling a distressed property (short-sale, foreclosure, etc.) had less-than-average-credit scores when they purchased. The banks are not about to take that risk again. As a result, lenders are looking at detailed credit history now more than ever. It is important to get your financial house in order before you make your first offer. If you don’t there’s little chance that your offer will be considered.
Reality Check: If you have poor credit, forget buying a short-sale. However, you may want to pursue a credit rescoring strategy (NOT credit repair). Some clients have improved their scores from non-qualifying to qualifying in a few short weeks.
(Sellers) Trying To Sell Your Home As A Short-Sale Without A Hardship
For you homeowners looking to get out from under your home, a short-sale might work. However, a primary requirement for getting your home approved is demonstrating a genuine hardship case—or an inability to pay. If you have any assets that can be liquidated to pay back the lender, then it’s unlikely that you will be approved for a short-sale.
Reality Check: Not everyone qualifies to sell their home as a short-sale. The bank always has the last word.
Regards,
