Buyers now are aware that there isn’t anything short about a short sale when it comes to waiting for bank approval. Many banks have taken steps to expedite the process but let’s face it, short sales take time. Buyers who have flexible living arrangements and have time to wait have more of an advantage over buyers who are in a time crunch to find a place to live. Buyers who pursue short sales should work with a real estate agent in Colorado Springs that understands short sales. Before submitting an offer on a short sale property, the buyer’s agent should find out more information regarding the short sale so the buyer can make an informed decision whether to proceed with an offer or pursue another property. Below are a few questions buyers should get an answer to.
1.) How many mortgages are on the property? If there is one mortgage then the short sale may not take as long as a short sale where two mortgages have to be negotiated by the listing agent. If there are two mortgages and they are with different banks, that can further lengthen the short sale process. The second lien holder may not be cooperative and cause delays.
2.) Are there any other liens? It is not unusual for the seller to have additional liens on the property such as a tax lien, lien from a contractor that completed work on the property, or lien from a credit card company. If there are additional liens, has the seller worked with the lien holder to come to an agreement so the listing agent can proceed with the short sale? Your Colorado Springs real estate agent should find out who the other lien holder is and the amount of the lien from the listing agent. In this situation, the outcome of the short sale is dependent on all parties coming to an agreement so the short sale can successfully close instead of going into foreclosure.
3.) How far along in the short sale process is the listing agent at with the bank? If the short sale is in the very beginning stages of the process, buyers can expect it to take longer. Does the bank have all of the required documentation from the homeowner and is it up to date? Has a negotiator been assigned to the file? Is the seller responsive when the bank requests additional documentation? How many sellers are involved and are they out of state? If it’s a divorce situation, are the sellers collaborating with the listing agent and the bank? If there was a previous buyer under contract, the short sale process may be further along with the bank. Another indicator of how long the short sale will take is to find out if an appraisal has been completed yet. There are many more factors your real estate agent can look into regarding the short sale and that is why you want to make sure and work with an agent that is knowledgeable with short sales in Colorado Springs.
4.) Is it a VA or FHA short sale? If the mortgage being serviced by the bank is a VA or FHA backed mortgage loan, additional delays may occur since the bank now has to deal with the Veteran’s Administration or Department of Housing and Urban Development for short sale approval. VA and FHA will have their own requirements and how much they will accept for the purchase price of the home in order to approve the short sale.
5.) Is the listing agent experienced with short sale transactions? Short sale transactions are heavily impacted by the listing agent and his or her level of competency when it comes to dealing with short sales. If the listing agent has not worked with many short sales or does not communicate frequently with the buyer’s agent regarding the status of the short sale, that is not a good sign. Is the agent submitting all offers to the bank or one offer at a time? Is the agent a Certified Distressed Property Expert (CDPE)? If so, that is a positive indicator and something buyers should even consider when choosing a buyer’s agent to assist them with the purchase of a short sale.
Short sales can be a long process but if all parties communicate and are responsive to the bank, the short sale can move along more smoothly. There are many unknowns with short sales but getting answers answers to some questions up front can help buyers decide if the short sale is worth pursuing, considering their situation and timeline.
If you need assistance with a Short Sale in Colorado Springs, contact Patricia Beck, your Colorado Springs Realtor® at 719-660-9058