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Short Sales represent a large number of homes currently for sale in the Denver real estate market, particularly for homes under the $300,000 price-point.
To become a successful short-sale buyer, Denver-area home shoppers should prepare to make their strongest offer possible. The reward for short-sale buyers is that they'll generally be able to purchase the property at a very attractive, or below-market price.
Here are my top 21 tips to help you plan for a short-sale purchase:
1) Get Your Financing Approved In Advance
Very few sellers will bother with a buyer who doesn’t have their loan financing pre-approved. No contingencies! Be ready to verify funds and down payments, too.
2) Remember: There Are No Firm Timelines
In the wild west of short sales, there are no guarantees that you'll get the property, and no timelines. Most short sales have many unpredictable twists and turns. With hundreds of different investors, requirements, and potential surprises, there’s little predictability. Nobody, including the seller, knows whether the short sale transaction will actually close. Remind yourself of this often!
3) Can't Pressure The Short-Sale Lender
Real estate agents cannot strong-arm the short sale lender into accepting any particular offer, but there are several things that can be done to present the offer in such a way that'll make your offer more persuasive. Before I submit an offer, I coach my clients about what we need to do. Give me a call and let's discuss.
4) Anticipate Poor Communication
Communication from the seller, listing broker, and especially the short sale lender, may be dismal at times. This is usuallly because they have no information, and no answers. Short sale lenders are notorious for communicating little of anything, until they’re ready.
5) The Transaction May Fall Apart
The seller may decide that they're no longer interested in pursuing the Short Sale, even well into the process. This can occur because of many unpredictable and seemingly wrong-headed reasons. Some of the sellers' reasons may include their tax liability and deficiency judgments, or simply because the hassle of pursuing the short sale is too demanding, tedious, or emotional.
6) Your Termination Rights
The Short Sale Addendum to the purchase contract allows the seller to terminate the transaction anytime, prior to their lenders’ acceptance. As a buyer, you also possess this same right of termination.
7) Prepare Yourself For The Possibility Of Foreclosure - Without Notice
Short sale lenders will not necessarily stop a foreclosure action, in hopes that a short sale will work for them, or the parties to the short sale transaction. Stopping a short-sale lenders' collection and foreclosure efforts would weaken their position and potentially cause further financial loss. Sellers may be able to postpone a foreclosure sale date, but there are no guarantees that the short sale lender will comply.
Michael Dagner is an expert in Denver-Area home sales,
and a member of Short Sale Superstars. Call today, (303) 514-4000,
for help with your short sale, or purchase.
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