Friday, May 20, 2011

Legal Tip: 7 Numbers Every Short Sale Buyer Should Know Before They Buy!

7 Numbers Every Short Sale Buyer Should Know Before They Buy!

Underwater Short Sale Words on Calculator 

An informed buyer is a good buyer, and short sale buyers need more and different information than buyers of conventional properties. One of the top two reasons why short sales fall through is that the buyer “WALKS.” Why do they walk? They walk because they get fed up and tired of waiting – regardless of how good the deal may be. This cannot always be avoided, but the chances of it happening with your buyers can be reduced by giving them the right information. 

Just because a property is being offered for sale does not mean it will ever go to settlement, but a salesperson can certainly enhance the chances of settlement by gathering the facts before they offer the contract. Here are some facts to gather from the Listing Agent to help inform your buyer clients. Note: prior to asking these questions, it’s important to get permission from the buyer to ask them, and the Listing Agent will need to get permission from the seller to answer them. This is just the right way to do business.

1. How many offers are being “pended?” Would you get the buyer involved if there were 10 offers already being “pended?” It’s up to the buyer.

2. How long has the property been on the market?

3. How many short sale transactions has the Listing Agent completed?

4. What is the average price of the last five traditional listings that have sold in the marketing area?  Why put a buyer through the process of buying a Short Sale property when you could find another property at the same relative price that is a traditional listing?  One of the main attractions of a Short Sale property is the PRICE!

5. How many payments has the seller missed? It takes time to complete these sales, and foreclosure could take place prior to a short sale transaction being settled. It’s important to know how long it takes for a property to be foreclosed on from the time of the first missed payment until the “foreclosure sale.”
6. How many second or “junior mortgages” or liens are on the property? Junior mortgages can be a real deal killer.

7. What’s the contact number for a Home Inspector who can inspect the home on a short notice?

The major complaint I hear from REALTORS® about selling short sales is the lack of communication from the bank, and this has been the major complaint since short sales became commonplace. Many REALTORS® I know are now using the services of an attorney to negotiate with the bank, and their success has been noteworthy. Having the attorney write a letter on behalf of the buyer and the seller tends to have a very positive effect on the approval process. After all, “silence” can kill a deal as quick as anything I know, so why not give it a try? Good luck and let me know when I can help you in the future! Thanks for reading!

Excellent advice from Leroy.

Bill Tucker
Tucker Griffin Barnes P.C.
Charlottesville, Virginia

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