May

6

Long Island Short Sales: (Try) To Buy Or Not To Buy

Filed Under Buyers, Long Island Short Sales |


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Throughout Long Island, short sales have become common practice. If you’re reading this article and don’t know what a short sale is, click here for a quick explanation. With the increase in Long Island short sales, I have seen a tremendous surge of buyers looking to purchase a short sale.

So if you’re reading this article and you find yourself asking, to buy or not to buy (a short sale), then this information is for you.
Assuming you know what a short sale is, I’m going to move right to the point, should you buy a short sale? And of course, the simple answer is, it depends. If you’re out looking at homes on your own because you know more about real estate than a professionally licensed salesperson, well best of luck to you. Stop reading and go buy your short sale (little poke at the know-it-alls).

Okay, so we got rid of those people. Now, if you’re out looking on your own because you’re just new to the whole experience of buying a home, then I would say you should not jump in and try and find a “deal” on a short sale. Why? Because you don’t know what you’re doing and you’ll find that you’ll waste a lot of time and ultimately become frustrated by your lack of progress.

If you’re working with a buyer’s agent because you’ve come to understand that maybe you need a little help, I would say go forth with caution when considering a short sale.
At the end of the day, there are several factors to consider when buying a short sale. One major characteristic is time. Interest rates will remain as historically low as they are now, for only so long and a short sale takes longer to close because it’s a much more complex transaction. Several factors like seller cooperation, and listing agent and attorney competence play tremendous roles in the successability of a short sale.

For me, it’s relatively easy to determine whether a short sale is worth an offer or not and it has nothing to do with whether or not a listing agent says a short sale asking price is “approved” or not. In fact, I shy away from short sale listings where an agent has an “approved” amount. It means nothing.

I ask four to five simple questions to a listing agent of a short sale to determine if it’s a go or not. Unfortunately for you the reader, I’m not just going to put those questions in this article. You’ll have to call me at 631.831.9048 and discuss hiring me as your agent if you’re serious about buying a short sale (I’m a Licensed Real Estate Salesperson so there are no fees other than my commission which is paid by the seller at closing).

Since I’m a nice guy, I will disclose one question I ask every listing agent who has a short sale to sell. I ask them, “How will the offer be presented to the bank if accepted by the sellers?”

What does this mean to you the reader? Nothing. But it is an extremely simple and effective question for me to ask because the answer will almost definitely let me know whether or not it’s good to try to buy or not to buy.

While I was writing this article, the phrase “To buy or not to buy” seemed lacking because you don’t simply buy a short sale. A buyer tries to buy a home via a short sale. Earlier, I mentioned factors that may help or hurt the chances of a successful short sale. There, I didn’t mention the bank or banks that hold the mortgage on a particular home. Some banks are so ill-equipped to handle what is happening in this real estate industry that they simply take a long time (3 to 6 months) to actually review the short sale deal.

Do you know what banks these are?
I do.

Again, when you’re considering buying a short sale, keep in mind that if you don’t know what you’re doing, chances are you will continually be frustrated to find a lack of progress being made with regard to your offer.

Now I want to comment on whether or not a short sale is a “deal” or not. For the record, I can say that in most cases, you will be paying fair market value for a short sale. Let me repeat, in most cases, prepare to pay fair market value. What is “fair market value” (FMV)? It is not what necessarily what the asking price is. Trust me on that. FMV is simply: What like-kind homes in the same area with the same features have sold for within the previous 90 to 180 days. Period.
With a listingbook account from me, I provide all my buyers the ability to establish FMV and together, we make offers that count. Regardless of the listing agent, my offers get accepted, go to the bank (that’s key) and my buyer clients close.

So if you’re out there to “get a deal”, I can say that you almost certainly will not pay more than FMV for a short sale. If you’re serious about buying a short sale (or foreclosure), please call me and let me help you do it right - 631.831.9048.


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