Navigating the Short Sale Market
Short sales can present great opportunities for buyers, especially those who may not have been able to enter the market a few years ago and are now looking for their first homes. And the data reflects this opportunity—more than half of the homes that first-time homebuyers purchased last year in California were foreclosures or short sales, according to the California Association of REALTORS®.
“From a buyer’s perspective, there may be a number of benefits to purchasing a short sale,” said Kathy Mehringer, director of risk management, Southern California for Coldwell Banker Residential Brokerage. “For example, every short sale that successfully closes means one less foreclosure in the marketplace. This translates into a preservation of property values in the community. Short sales are also often priced at the lower end of the fair market value range, which may mean a good bargain.”
Buying a home through a short sale process, where the seller’s lender agrees to accept a payoff of less than the balance due on the loan, can be challenging. Since the negotiation is with a bank—or sometimes multiple banks—that doesn’t have an incentive to move quickly, the timeline can be much longer than with a traditional sale.
“You need to have a whole lot of patience, know that the process may be frustrating and realize that you may not get the first home that you set your heart on,” said Stephanie Vitacco, sales agent with Coldwell Banker Residential Brokerage in Woodland Hills. “It can be an emotional ride. But, if you’re prepared for process, you can find a great deal.”
Some top tips from Mehringer for a successful short sale purchase include:
- Interview your agent before looking at properties. Is your agent experienced with short sales? Does he or she have a system in place to package your offer and present it in the best possible light? Don’t be afraid to ask for references and testimonials.
- Determine the realities of the marketplace. Are short sales a significant segment of the available inventory?
- Get your financing in order. Your offer should include a current pre-approval letter, verification of down payment and closing costs, and proof of creditworthiness. Lenders who are considering short sales want a bona fide buyer who is committed to the process.
The government will implement the Home Affordable Foreclosure Alternatives (HAFA) Program next month, which aims to streamline the short sale process. Last year, Coldwell Banker Residential Brokerage launched a program to expedite the short sale process and give Coldwell Banker agents the tools they need to educate their clients and complete a successful short sale. It’s the first program of its kind to be developed by a residential brokerage firm in California.
Coldwell Banker Residential Brokerage has been committed to helping our clients achieve and preserve the dream of homeownership for over one hundred years. Our short sale experts are ready to guide you to a new home.
Contact:
David Becker
310.230.2406
david@dwbestates.com
Good Summary and some good advice