Buyers want bargains these days in real estate transactions. Short sales are attractive because the distressed homes value had come down ranging from 20% – 50% plus from its peak. But records showed that in the past 3 years, 95% of closed short sale transactions were all from multiple offers – nationwide.
So what is the strategies in bidding a short sale properties? You want a bargain, but do you want to pay what is asked for? The answer is pretty obvious: if you don’t, you won’t get it.
There are a few things a buyer can look into before seriously deciding whether one MUST HAVE the property:
- The condition of the property: Is it an AS-IS sale? Any repair work needed to be done? How much one has to spend in order to bring the property to a “livable conditions”? or a “functional conditions”.
- Some short sales do not include the amenities, such as washer, dryer and refrigerator, and often times buyer cannot negotiate these items . Be prepared that extra money needed to be set aside after closing to bring up a “functional” property.
- Know the fact that one’s offer price is not the final price of sale, the lender(s) have the final approval of the price. If lender(s) counter your offer and ask for more, what is your HIGHEST and BEST offer?
Bottom-line for short sales: Nothing is certain. In 2010, there were incidents even that the lenders “approved” a sale price but still came back after 3-4 months and ask buyer to raise the offer price due to the appraised property value had gone up in all the long processing period. What should one do after all these waiting and bidding wars? It is not an easy answer. In my humble opinion, if you are a serious buyer, and you want to have a smooth, no pressure transaction and a pleasant purchasing experience: BUY NORMAL, NO DISTRESSED PROPERTY. AVOID SHORT SALES, PERIOD