Click here to read our Short Sales FAQ
Regardless of the reason you need to sell your home, you find that the value of the home is less than your mortgage owed. You are in a short sale situation. This has become quite common in the current housing market and The Fiddler Realty Team can help you through it.
First, listing your home will be the same process as an equity sale. A REALTOR® will visit your home and discuss the recent sales and listings in your area and find a fair offer price. While we certainly want to price the home aggressively, we also want to put together an offer that will be attractive to the bank so as to gain an approval.
Once we have an offer that is acceptable, we will look at their financing, proof of down payment, credit scores, etc. Then, we package the offer and short sale packet to the bank. Our team of short sale experts will handle all this for you. We will work with the bank negotiator for you. All sales costs involved will be part of the settlement with your lender…you will have no out of pocket costs.
From the time we get the offer and open escrow until we close escrow can take a couple of months. During this time, the lender will examine the information about you and the buyer. They will also order an independent appraisal to ensure that the buyer has offered a fair market price. Once this has been done, they will issue an approval.
A short sale will affect your credit! The amount that was settled will show as a charge off on your credit report. There is some debate as to whether the short sale is any better for your credit score than a foreclosure would be. Some professionals believe that lenders in the future will look more favorably on short sales because the sellers move proactively and did not just allow the foreclosure to go through.
One advantage is time. The sooner you can get out from under a credit problem and start building good credit, the sooner you will recover. In this climate, foreclosure can take up to a year to get through while a short sale can be done in a couple of months and then you will have a fresh start.
Purchasing a short sale can be tricky! You need an expert to handle this for you. There are great prices to be had, but if not properly managed, there is a great deal of frustration as well.
There is no universal method for handling short sales for the listing agent. Many will list the home artificially low in price to attract offers and then send all offers to the bank. They take no control over the process and wait for the bank to direct them. When we consider writing an offer on a short sale, we will identify this situation in advance and approach the offer accordingly.
When an agent sends every offer to the bank, all we want to do is put our name out there so that the lender is aware of our offer. We don’t want to try and outbid any offers they might have. When a lender has a file with 20+ offers in it, they are not as motivated to push that case through. They do not have the time to sort through offers and evaluate buyers based on offer amount, credit scores, mortgage terms, down payment, etc. These deals can take 3-4 months to hear anything. During this time, many of the offers will disappear and, in this market, prices might drop. We don’t want to try and outbid an offer from a buyer who might not even be interested months from now.
So, how do you purchase a short sale without the frustration? When we find a home you would like to purchase, your agent will approach the listing agent and offer to open escrow.
We will write our offer as if it were an equity sale. The seller and listing agent will examine our offer and perhaps counter. Once we have an agreement, we open escrow and put in a small deposit. Then we wait! The listings agent will submit only our offer to the lender for approval. We incur no costs, no inspection, no escrow costs, no appraisal costs to draw against the deposit until we have a firm commitment from the lender.
You, the buyer, are protected in several ways. First, understand that your deposit is protected. We can withdraw our offer at any time and for any reason. Second, you are going to be the only offer the bank sees. They will not have a huge file to sort through. They are much more likely to move our package through the system quickly. Finally, we are not making our offer in the dark. We are not competing against offers that might not exist anymore. And we are not in danger of someone coming in at the last minute and outbidding us. We are the only offer being worked. So, once we have our price agreed to, we can be comfortable that no matter how long it takes, it is our property.
Certainly there are offers that are rejected, based on price or terms, but we will know the possible problems in advance and be prepared for them. Your agent will strategize with you on possible solutions. By utilizing these methods, you can purchase a great home at a much lower price in a short sale situation.
We can help you with a short sale on your house, condo or other property anywhere in Southern California through our Multiple Listing Service (MLS). The Fiddler Realty Team agents are members of the National Association of REALTORS®.
Contact us for more information today for more information about Southern California Short Sales.