Short Sales can be a viable option for owners when their real estate is worth less than what the market will bear, and/or they can no longer afford to make mortgage payments. Sounds simple. But it’s really not.
The short sale process is rife with pitfalls, but they’re avoidable. The key is picking a Realtor who possesses the extensive training and professional experience to navigate both the seller and the buyer through what can be a laborious short sale process. Your best bet is to choose a Realtor who has earned their Certified Distressed Property Expert designation, or CDPE.
Tips for making a successful short sale transaction:
- Price the property properly. An experienced Realtor will run a Comparative Market Analysis (CMA) to determine the current fair market value of a property based on recent sales of comparable homes. Use your Realtor’s valuation to price your property properly. This saves time for all parties involved, and when it comes to short sales, time is of the essence.
- Offer a complete proposal. An experienced CDPE knows what a seller’s lender needs to make a positive decision, as well as what it takes to present a complete proposal. Again, time is of the essence. Work with a Realtor who has proven he or she can get the job done quickly and effectively. Choosing a Realtor with good, professional ties to your area’s lenders are a definite plus.
- Expect professionalism and experience. There are a myriad of steps and players involved in closing a successful short sale transaction. Each step and each player is critical to the outcome. It is imperative that your Realtor is equipped to stay on top of every phase to avoid unnecessary and sometimes damaging delays. Interview your prospective short sale Realtor carefully, and ensure he or she is equipped to get the job done before making your decision about whom you work with.
- Make a realistic offer. Lenders holding mortgages on potential short sale properties are more likely to approve a short sale when a buyer’s offer is close to fair market value. Remember, lenders take calculated, not arbitrary losses.
- Pre-approve the buyer. This cannot be stressed strongly enough. A competent Realtor should have a prospective buyer pre-qualified for the mortgage he or she is seeking to complete the short sale long before a fair offer is submitted. Lenders want all their questions answered up front. Avoid wasting their time and efforts, and the transaction has a better chance of being approved.
- Look under the rug. Make sure there are no additional lenders hiding in the wings. It’s not uncommon for real estate owners to have multiple mortgages on the property they’re trying to sell. A competent Realtor will do the research necessary to identify all lien holders on a property, and make sure each is ready and willing to accept a short sale transaction.
- Check for short sale fees. It is illegal for professional Realtors to charge up-front fees. Ensure that the Realtor you choose is only compensated if he or she successfully completes the short sale transaction.
For more frequently asked questions about short sales, click here. Hounchell Real Estate – RE/MAX Metro’s principal, Chris Hounchell, is a Certified Distressed Property Expert (CDPE), having completed extensive training in foreclosure avoidance and short sales at the Distressed Property Institute of Boca Raton, Florida. Chris has handled hundreds of short sale transactions throughout the Tampa, St. Petersburg and Clearwater areas during his distinguished career.
Hounchell Real Estate-RE/MAX Metro is the leader in general real estate, pre-foreclosure, short sale and foreclosure markets. Contact Chris today at 727-642-9107.