Phoenix Urban Living News. Real Estate In Phoenix Arizona

Expert Real Estate Agents Guide Buyers through the Short Sale Property Maze

Due to the current economic climate, short sale properties are plentiful. Many home buyers are viewing this situation as an opportunity to get a great deal. If you are a buyer looking to cash in on this market, utilizing a real estate agent accustomed to working with banks on short sale purchases can be much to your advantage.

A “short sale” is property that is being sold for less than what the property owner owes the lender. While short sale properties will be found on MLS (Multiple Listing Services) because the sale is being handled by a real estate office, the lender is actually in control of this transaction. The bank will determine the sales price, and will either accept or reject offers received from prospective buyers.

Buyers who are sure that purchasing foreclosed or short sale properties will result in a “steal” of a deal could very well be disappointed. Banks are not in the business of taking huge losses if those losses can be avoided. If a property is in reasonably good condition, and in a nice neighborhood, it will probably be priced in line with other properties in the area.

You should be aware that there are lenders out there that will deliberately price a home below market value in order to provoke a “bidding war” on a piece of property that is especially desirable or in a particularly good location.

This is not meant to suggest that there are NO great deals to be found, but rather that you may need the assistance of an expert real estate broker to help you determine which of the properties that have attracted your interest are the great buys.

From the buyer’s perspective, negotiating with a bank can be a very drawn out and frustrating process. Patience is nearly always required when you are in this market. While it is, of course, possible that your offer might be accepted right away, you may need to wait weeks or even months to get your offer accepted and your purchase closed. As lenders hold a power position in this sort of sale, it is not unusual for a bank to wait for multiple offers before accepting one.

Your real estate agent becomes your best ally during the negotiation process with the bank. A thorough understanding and familiarity with bank required paperwork in order to get your offer moving through the process is of course something you should expect. However, your agent offers even more value in being able to find out if your offer is competing against multiple offers, even while not knowing how your offer stacks up against the competition. Established relationships with bank personnel can never hurt in short sale offers.

There will be properties that are not in the best condition nor the best location. Lenders may be willing to loosen their lending guidelines in order to attract offers for these houses. However, for most properties, most lenders will follow conventional lending guidelines to finance a purchase, even a purchase of a short sale property.

Most lenders will require that a buyer submit a loan application to the lender directly to ensure that the prospective buyer qualifies for the purchase. However, lenders cannot require you to finance the house through their bank, so be wary of paying upfront fees, if your intention is to shop for financing options.

Real estate professionals are aware that legal questions can and will arise during a short sale property transaction. Most agents will advise you to direct legal questions to attorneys and tax questions to certified public accountants.