What are the steps to take in buying a short sale, from start to finish. How long does the process take? And can the $8000 tax credit be used? The home is located in Plainfield NJ. Thank You.
It was bothered by the agents standard answers of 3 to 6 months to get bank approval and not looking at why a buyer is asking this question in the first place. They are frustrated and want to buy a property at a good price don't bon truest the listing in there local area because we as MLS and agents have allow a mockery to be made of the MLS. My to the question is.
I have read the answers and know short sale very well form both the seller and the buyer perspectives. Short sales are a big problem in the real estate market right now frustrating buyers and buyer's agents. Unfortunately some agents are using this problem of selling excess inventory to take advantage of the banks, and steel the properties for investors. With the intention to resell the property simultaneous to the public looking for a retail buyer and make big profits off home owner in or facing foreclosure. This is causing the home buying public to not trust realtors that they can find them the good deals out there. So the public is going to the listing agents to make offer on short sales and they find out after signing an exclusive buyers agreement, that the property had an investor offer or was under contract with another offer and there offer was one on many back up offers. So what's going on? I see 3 big problems with short sale listing:
Agent's use them as an advertising source to get buyer interested in a home that is listed way under value. To get buyers to call them and sign an exclusive buyers agency agreement locking them into buying for 6 months. I bet this is even the case in the few states that don't allow Limited Agency. They probably circumvent that by using a team and Referral Agreement between agents. While this is going on the agent has an investor off in to the bank and is gather these names to buy the home form the investor either as simultaneous close or in 90 days as allowed by FHA.
The investor simultaneous flip. Agent gets an investor to make a very low offer and they work with the bank to get this accepted or countered at their banks drop dead point. Then while they are doing this the agent keep the property active on the MLS liking for buyers willing to pay close to retail price so they can make $20,000 or more on the simultaneous close. Usually the investor is the negotiator so they have no real interest that a short sale gets approved its how much money they need to make. Unfortunately this causes some home to be sold at foreclosure sale. The worst is asking the seller to Quitclaim the property to then buyer and stall the bank for 90 days so the new buyer can simultaneous close with a FHA buyer because FHA requires 90 days of ownership. I wish the banks would get smart and ask for a current title search for the title company with chain of ownership like lenders require. That would stop this fraudulent and dangerous practice the bank would say no sale and turn it over to the federal task force investigation this. Oh yea if your doing this it's real and I have talked to them and advised them on investor groups doing the quitclaim scam. Any agent that would even consider having his client give his property ownership to some investor need to be expelled from the National Association of Realtor and sued for breach of contract.
Some agent's don't know what they are doing on a short sale and should not be attempting it. Like the FHA and VA rules and the HUD form you have to fill out to get a short sale approved prior to listing it. They have specific rules forms and % of net to the bank that you must be within. If you don't know that please don't list short sales.
So what can you do as a buyer or buyer's agent? First off make reasonable offers. Do the work on want a good retail price for a home is. The bank would give the property away. In most cases it 86 to 88% of the current retail price net after closing cost, yep based on the dredged banks BPO(Broker Price Opinion. What do you do with the listing agent you ask if an offer is accepted and presented to the bank? If no make an offer that clearly states when accepted your offer will be exclusively worked on with the bank until the bank reject your offer. If they don't feel your offer is high enough for that, then have a first right of refusal if any other offers come in you have 48 hours to make your offer match their more desirable criteria or back out of first position. Also have a time line for presentation to the bank 72 business hours after acceptance of the owner.
If there is an offer find out if there are back up offer or if you can be the primary back up offer with the same binding contract if now walk away. Now please as a buyer make a reasonable offer base on the sold comparables. With your agents determine the reasonable retail value of the property per above guidelines. Now if prices are dropping 5% a month ok offer 5% less than last month's sales. Use your agent and do the home work and the bank will accept your offer. If you offer 50% the bank will put it in a stack of file that won't be worked on.
It makes me nuts to see agents accepting offer after offer on a property. Buyers have rights! You as an agent need to advise your seller on accepting a good offer on the property based on it selling criteria. Agent and seller have to assume the responsibility to accept good offer and maybe then banks would be able to complete them on 20 to 30 days. I want to see the term low ball offer to get the ball rolling taken out of our language as Realtors. Lets replace it with we have an offer or we do not have and offer the owner accepted or we have an offer with a price contingency? Let's make the buyers feel valued again.
Welcome to the SpottedHome.com Blog
