Bill Wagner - REALTOR® 770 316 5519
Buying a "Short Sale" Home
If you are looking for a steal on a home there are a few things that you can look at that may help and other than foreclosed homes there are the homes that are going into the foreclosure process. This is where people are trying to sell there home before the bank takes it from them. They reduce the price and sell it short of what is owed on the home, hence the name “short sale”.
If you are out looking for bargains in the listings you will definitely come across a few of these. It is important to make sure you have an agent that is experienced in buying this type of home. To be prepared you will need to already be pre-qualified by a mortgage company or a bank and have the pre-qualification or money letter for your offer contract. You will definitely need a REALTOR® because of the paperwork involved. Most everyone will never be able to do the financial paperwork alone the bank will require with your offer contract not to mention the normal contract paperwork. Your REALTOR® will have to work up a HUD1 Statement to go with your contract offer showing where all the money will go and how much it will cost the bank. This process is very time consuming for the listing and buyer’s REALTOR®. Both will earn their money in this process.
Once your agent has turned in the paperwork to the bank, it will seem like forever before everything starts to move. If the bank has pre-approved the selling price it could move rather quickly, within a week or two. In most cases this is not the norm though. Most banks will not even look at the conditions of the sale until they get an offer contract on the home. Once they receive it, they will assign a bank officer to your “file” and everything will be put into the computer under your “file”, this usually takes about a week. Then they order an appraisal and this will take another week to ten days to get the appraisal back and get it into your “file”. In most banks the “file” will then be turned over to an Asset Manager for approval. He can turn it down right there or he can approve the offer. After he approves it your “file” will go to an investor with some banks and they will have the final approval. There is no timetable for this, it actually depends on the bank the mortgage is with, some are good and some are terribly slow.
The whole process can take up to two months. Then again it could be two weeks. It all depends on the bank. Have patience during this process. I get calls with people mad because the banks are taking so long. There is a reason for this. One is the bank officer assigned to your “file” only gets paid about a hundred dollars a closing. He will work on the easy to close ones first, so he can get paid. Another reason is the banks are short staffed after this last year, there are not enough employees due to lay offs in the banking industry. Each officer has maybe one thousand files to work on rather than the ten or fifteen that the officer had to deal with just two years ago. They are under pressure to get them processed by their bank as quickly as possible. Just the shuffle of paperwork between offices slows the process.
Short sales are a great way to buy a bargain home, if you have the patience. Make sure you chose an experienced "Short Sale" agent to help you with this purchase. Someone who knows how to write up the offer contracts to protect you in the buying process. You can save thousands, even hundreds of thousands of dollars on a home. You will need patience for this type of purchase.