Short Sale Q & A
With short sales taking up such a large portion of homes on the current national real estate market, questions about how the short sale process works are frequent. Today we will talk about 3 common questions and concerns about short sales and give some tips for how to make the short sale process a smooth one.
First things first, though. What exactly is a short sale? Simply put, a short sale is an alternative to foreclosure for lenders and homeowners. A short sale is performed when a lender agrees to allow a homeowner to sell his home for less than what is owed. This process results in a chance for prospective homebuyers to acquire the short sale home at a very attractive price and for home sellers to have less negative impact on their credit.
Question 1: How long does it take to complete a short sale?
This is usually the first question prospective home buyers or sellers ask when considering a short sale. Unfortunately, there is not a definitive answer to this question. Many real estate agents will tell you that from the point of submitting an offer it typically takes 3 to 6 months to complete a short sale. But the truth is the length of time to complete a short sale varies from lender to lender and from home to home. The good news is that things seem to be improving in this regard. In California the average time it takes to close a short sale recently dropped by around 19%.
The bottom line, though, is that the short sale process is generally not all that short when compared to traditional sales. If time is of the essence, a short sale may not be the best choice for you.
Question 2: Are all real estate agents trained to handle short sales?
You may be surprised to learn that real estate agents are not required to have even one minute of specialized training to represent a buyer or seller on a short sale. Unfortunately, this lack of required training can often hamper the short sale process. Thankfully, there are many real estate agents who have pursued a thorough education in short sales. If you are considering a short sale, it may be in your best interests to choose an agent that has SFR (Short Sales and Foreclosure Resource) or HAFA (Home Affordable Foreclosure Alternatives) designations. The National Association of Realtors® official website allows you to search for Realtors® in your area that have such designations.
Question 3: How can I get my short sale offer accepted?
Since your first offer is likely to be your only offer on a short sale, make sure it is realistic. Your real estate agent will be able to look at the local market and help you determine what a reasonable offer would be. It’s also important to be as attractive to a lender as possible. Including a pre-qualification letter with your short sale package will show the lender that you are a serious candidate. If you are able to put down more than the customary $1,000 earnest money deposit, this will also be appealing to a lender.
Once again, having a real estate agent who is a short sale expert is a great aid to getting your short sale offer accepted. Your agent will be able to give you additional suggestions for how to make your offer stand out and increase your chances of having it accepted.
These three questions are only a few of the many questions that both home buyers and sellers will have about short sales. What is most important is that you don’t hesitate to ask whatever questions you might have. If you have any questions you would like to ask the Advantage Group’s Certified Short Sale Experts about, please feel free to contact us at firstname.lastname@example.org and we will be happy to assist you.
Photo credit: Alan Cleaver