Help buying a short sale (Palm Beach: comparable sales, for sale, real estate)

[JIMMY WACK]

Does anyone have any advise on buying a short sale? I found a condo that I'm interested in but it's a short sale. I believe a short sale is when the owner is not making his payments to the bank and the property is listed for less than the owner owes the bank. Does anyone have any advise on bidding on a property that is a short sale? I have also heard that their is a lot of paper work that has to be done properly before the bank will consider the offer. I was told to look for a realtor who has experience selling short sales. I was also told that most offers on short sales fall through and that it is easier to deal with a foreclosure. If anyone knows a realtor that deals with short sales often please refer me.

[madcapmagishion]

Offer what you want to, but be prepared to wait. I bought my daughter a house last year, offered what they were asking and it still took the bank 8 weeks to accept the offer, and I was paying cash in full didnt need financing . It was explained to me that it took so long because it had to go through some sort of committee at the home office.

[fsu813]

My short sale took 6 months.....!

[madcapmagishion]

Originally Posted by fsu813

My short sale took 6 months.....!

amazing isnt it? they complain about no one buying homes and look how long the banks drag it out

[fsquid]

It is because the volumn is so much right now. They don't have the man power to keep up

[EricBoyd]

The challenging part of the short sale process isn't really with the buying side, but rather with the listing side. If the listing agent isn't competent enough to handle the short sale process, then the likelihood of a lengthy process is very high. Unfortunately, you won't really know that until after you're going through the process. It can be frustrating, for sure.

One common "mistake" some short sale buyers make is that they submit very low offers on short sale listings. There's a misconception that banks are dying to get rid of these properties, so they'll take whatever price they can get. I always tell short sale buyers to make a competitive offer if they want to buy the property. Your sales agent should show you recent comparable sales, and the buyer should make their offer based on that. Why? Because the short sale negotiator at the bank is going to get roughly the same list and determine what an acceptable selling price should be. When I've been the listing agent, I've even advised a seller to reject a lowball offer, knowing the bank wouldn't accept such a low price. The seller has an obligation to their lender to get the highest possible price for the property in a short sale, especially since they are likely on the hook for any unpaid balance.

[rwbil]

I am a Real Estate Broker and the problem is usually with the Listing Agent and the Sellers. You want to make sure the bank has already agreed upon a selling price, otherwise the process can take a long time. The bank is going to want a couple of Broker's Opinion of Value and they are usually not willing to negiotiate much below that. I have seen listing agents list the property below what the bank is willing to accept and it just waste everyone's time. You also want to make sure you use a title company that has worked short sales and is familiar with all the documentations. A good listing agent will have provided all the documents the bank will need from from the seller in advance and have an already agreed to price with the bank.

If you have question you can message me.

[jsimms3]

A comparable BOV for a short sale? That seems odd. I worked on some commercial short sales this past summer, and no comparables were involved (I'm a finance background and these were income producing, so I guess it was a lot more complicated and it was all about tweaking the potential write down and positioning the property for the right investors). I do agree with everyone that lenders are usually in no hurry to dispose of the property. Remember, they are losing money on the short sale. They hate that! They are weighing what kind of write down they're going to have to put in the books, and often they think that the price can rise if they hold onto the property long enough.

There is a short sale down the street from my parents. It started kind of high, and it lowers by about 5% a quarter. It's still on the market and it has been 2 or more years! It's also a fabulous house (we're talking big money...big difference from a cheap snatch and grab that everyone is after right now, although I've been reading the 2nd home markets in Palm Beach, ME, and Hilton Head had record years in 2010).

And I second that the lender having a great listing agent can make a huge difference in timeliness. Just don't try to lowball their already low short sale; it won't work. Also, if you're finances aren't in order, a bank is not going to make the same mistake they did with the first guy!

[Guamanians]

Originally Posted by fsquid

It is because the volumn is so much right now. They don't have the man power to keep up

Thats what they might tell you, but I don't think thats the only reason.
Why do banks & real estate brokers tell people to offer more than it is listed for?
It is no coicidence that many of these banks involved in foreclosures have also received bailout money. The banks accepted bailout money because they claim they were bankrupt by the real estate crisis.
BUT... those same banks are holding onto foeclosed properties even though there are plenty of buyers out there. I call BS.
The banks are intentionally stalling for 2 reasons
1. The more faulty loans/foreclosures that they have on the books means the more bailout $$ they can receive. They use those stats as proof that they need the governments aid.
2. banks are intentionally starting bidding wars on foreclosed homes. They will list these homes at $90,000, but they won't sell it for $90,000. They wait until someone offers them $120,000. The banks think that the market has hit rock bottom, and that they can get back more money as the market starts improving. They are not in a hurry to sell because Uncle Sam will just give them more $$$.
For buyers this is similar to buying an "open box" item at a store for 95% of retail price. It is a bad buy!!!

[JIMMY WACK]

So in theory, the bank already has a price set that the are willing to accept and the listing agent should know that price. Is the listing agent allowed to tell the buyer that price? Next, their are several properties similar in price, size and condition to the one that is a short sale in the same development, all have been for sale for quite a while. What benefit to me would their be in the short sale vs the listing that isn't? Does the seller have any say in the sale or does the bank dictate what the acceptable price is???