Short Sale Questions from a Prospective Buyer

Five Questions a Buyer Needs Answers to Before Looking at a SHORT SALE Property:

1. Has the Seller’s agent submitted the homeowner’s package to the bank, and has it been approved? (Okay – that’s more than one question.) If the bank hasn’t yet determined that the Seller is qualified for a short sale, a prospective buyer may have a long wait only to find that the bank won’t approve.

2. How many lienholders are there? If more than one, are they the same lender? (Again, two questions – not one.) The more lienholders, the more complicated the transaction. If the Seller’s agent knows the answer to the question, that’s a good sign that communications with the bank are underway.

3. Has a loss mitigator been assigned? If the Seller’s agent doesn’t know what a loss mitigator is, that’s a bad sign. If one has been assigned, that’s good – that’s more evidence that the bank is communicating.

4. Has a third-party BPO already been done, or is the bank waiting on an offer? (Again, a two-part question.) BPO is short for Broker Pricing Opinion. This written opinion lets the bank know – or think they know – the market value of the property. If the Seller’s agent can tell you that the BPO has been done, you should have a much shorter response time from the bank if you decide to bring an offer than if the bank has no clue as to value.

5. Are you using a professional negotiator? Short sales require a lot of communication between the Seller’s agent and the bank. A lot. If the Seller’s agent is working with a professional negotiator, HURRAY! This should mean that a Buyer is NOT likely to experience long, long delays in getting a response, should he decide to bring an offer.

Short Sale Marketing and Offers

How will your house be marketed in a short sale? Marketing for a short sale property is the same as it would be if your house were not being short sold. Pretty much the only difference is that all the marketing materials must disclose that “all terms of offers are subject to lender approval.”

Once your realtor puts your house on the market, real estate agents will show it to prospective buyers and we wait for an offer. Try to price within the bottom 10% of the active listings – that should generate plenty of activity and result in an offer within the first 30 days on market.

As soon as we have an offer, we submit it to the bank along with supporting documentation. The bank’s “loss mitigator” is our point of contact during the entire process. He or she will review the package in its entirety before ordering a BPO (Broker Pricing Opinion). This BPO is similar to an appraisal and will require a third-party agent to come to your house and take photos of every room…even the garage. They will then create a report for the bank that reveals the current value of the home.