Buying a San Diego home in short sale status -

So what does this mean if you are a buyer looking for a deal? Many have heard the term “short sale” but may be unfamiliar with the details. Just because it is called a “short sale” it doesn’t mean it will be a quick transaction …

A few things to know before becoming involved in a short sale purchase in San Diego:

• Don’t assume that the home is a bargain. Some agents deliberately offer the home at a discounted price to ensure lots of offers and “overbids”.
• Before you get excited about a bargain have your agent run a comparable sales analysis to find out what the home’s true market value is.
• What status is the home in? Has a Notice of Default already been filed?
• Who “owns” the loan – homeowner/seller or lender? Is there more than one loan on the home and what are the loan balances? Note: The seller still actually owns the home.
• Have your agent ask if any offers are currently on the table or have any previous offers been rejected.

Many homes in pre-foreclosure are offered for sale as short sales. You may search the San Diego MLS for “short sales” here – our search functions include a text search of the listing agents remarks which usually state if the home is a short sale.

Know the Process:

With our help we can assist in determining the value of the home and help you decide on what price to offer the seller. It’s also important to discuss with us the highest price you might go to should the bank counter your offer – this remains confidential we don’t share that information with the sellers agent.

• Understand that although the homeowner/seller may accept your offer, but the note holder/lender may not agree. Often the Lender will insist on changes to the contract accepted by the seller, they may try to counter the buyer on price and or insist on not paying for termite clearance or home warranty insurance.
• Another thing to be prepared for is that the Lender may completely ignore your offer all together, or take months to respond. Other times they go the easy route and just pick the best offer on the table – so don’t always expect a counter immediately or quickly.
• Make the offer contingent on the lenders accepting your price. Also include in the offer as much information as you can to prove to the lender you can afford the home. (ie. Pre approval letter, down payment amount, etc.)

Finally: Protect Your Rights

• Place a time limit on your offer to the lender. Many times the lender will drag their feet in accepting an offer in hopes that a better one may come along before they accept one that is already on the table.
• Make sure to put in the offer that the purchase is contingent on you being able to have a home and pest inspection performed on the house.

Whether or not the process will be a headache all depends on who you are working with. An agent who’s never done a short sale might make the process more painful than necessary, while one who has at least done a handful of short sales will be prepared for the transaction and understand what’s involved.

Don’t be put off from considering short sales, in many neighborhoods they can make a large proportion of the homes offered for sale and there are some great deals out there offered as short sales. As your San Diego Realtor we will be able to guide you to a home that’s right for you! Contact us for a chat so we can determine if we can help!

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