By Scott Newman
1) Find an expert to represent you
This is the most important piece of advice I can possibly give you. But this is going to take some work on your part. Unfortunately, any agent out there can plop down $150 and go complete a class that will allow them to call themselves an expert on any number of things. Even more unfortunate is the fact that 99% of the agents on
there bring little to no value to the table on a transaction like this. You therefore need to find an actual expert- someone who is intimately involved with numerous aspects of distressed/bank-owned property and who can bring value to the table in the form of
negotiation skills, knowledge of the process, and their inside connections which often are the difference between getting a deal done or not.
How do you find such an expert? Comb the internet, ask for referrals, call your local Realtor association and ask…do whatever you have to do to get yourself in front of 3-5 great Realtors so you can ask all your questions and pick the best one for the job.
One last thing to note is that while short sales are very complex transactions, you need to make sure your agent has the local market knowledge and experience to complete the deal because at the end of a day you’re buying a piece of residential property just like you would from a private seller. You’re better off taking your number 2 or 3 choice if the others don’t have knowledge of the area you’re looking.
2) Know what you’re getting yourself into
Short sales are not standard transactions and they take a long time. They also come with absolutely no guarantees and you very likely could spend 6+ months waiting for your offer to be accepted only to find out the property will end up going into foreclosure despite everyone’s best efforts.
If you’re not prepared to be flexible, patient, and to keep your emotions out of the deal as much as possible short sales are not for you. They’re also not for you if you’re on a tight deadline, want to get the tax credits which are up at the end of April, or for any
number of other complicated scenarios which many buyers find themselves in.
A lot of people equate a short sale with a great deal and many times that’s true but at the end of the day prices are down across the board and interest rates are low so if short sales aren’t for you then there’s still plenty of other opportunities to get a great
deal on a foreclosure or standard listing.
3) Set realistic expectations
Let’s get a few things straight. You are not going to get a phone call twice a week keeping you posted on the most minute details of the transaction and you’re going to get antsy and nervous. Unfortunately, the most consistent thing you do when you’re trying to buy a short sale is wait. Weeks will go by with no status update, movement, or progress of any kind and if you’re not prepared for that don’t buy a short sale.
Setting realistic expectations is also important because it will help you communicate better with your agent.; if you know what to expect going in you will reduce your frustration level when things begin to drag on and you will have no reason to expect to hear from your agent because you’ll know not hearing any news is normal.
4) Keep emotions out of it
If you’re buying a short sale it’s because you’re after a good deal-if you weren’t you would never go through all the extra hassle! With that in mind, this is an investment and you need to do your best to look at it as such.
Be prepared to bid on and live in your top 3-5 choices instead of just your top choice. Be prepared to make offers on all 5 and accept whoever will give you the best price. The point is you need to be flexible and keep emotions out of it. It’s a house and you’re buying it to take advantage of the market. So when the bank comes back and wants that extra $10,000 think of that as money out of your pocket and hold your ground because you know just how many great deals out there!
5) Be patient
This has already been touched but it bears repeating and ending with! If you stay calm, cool, and collected you will benefit immensely. The important thing to remember is if you follow all the advice you’ve already been given this will not be a problem. You’ll have realistic expectations so there will be no need to lose your
cool or panic, you’ll have a great agent representing you, and you’ll thoroughly understand the process so you will be able to sit back and let things happen- the essence of patience!