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Short Sales — Lead Buyers to Success

July 13, 2011

 

Mortgage Banker Gregg FitzGerald

Most of us are not good at waiting, and that very human quality is what prevents many short sales from going through. A buyer makes an offer, and then waits and waits and waits, without knowing whether it will ever be accepted or when. That’s the reality of the short sale process today.

So how can agents on the buying and selling side determine whether short sale buyers have the staying power necessary to close the deal?

  1. Earnest money deposit: A committed buyer should be willing to make a significant deposit before the offer is accepted and have it put into a trust account.
    Traditionally a deposit was only required upon seller’s acceptance of an offer, but today too many buyers make multiple offers on several homes and wait to see which one resolves itself first. That is treacherous for sellers of homes inching their way towards foreclosure because they have to start the lengthy process with another buyer all over again.
  1. Moving inspection period to the front of the process:  This shows commitment to the purchase for two reasons: it requires the buyer to have some skin in the game early in the process. It also shows a willingness to give sellers time to address issues upfront that could be deal-breakers at the end.
  2. Willingness to buy home as-is without seller paid inspections or warranties:  In plain terms, a lender is interested in recouping as much of its loss as possible. Because the seller’s costs are paid for by their lender, it will be more inclined to accept offers that increase its net proceeds – not reduce them.
  3. Longer approval period in contract:  Requesting seller approval in 30 days is an impossible contingency in most short sales today. They can take anywhere from weeks to months to come to fruition, so a serious buyer will need to understand a longer approval window of 120 days.

Both listing and buying agents play an essential role in the short sale process, regardless of the seriousness of the buyer. The listing agent must understand the lender process and stay in touch with the buyers and their agent. That is one sure way to minimize the emotional stress and frustration that often makes the buyer give up all together.

 

Source:  Activerain.com

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