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Monday, February 18 , 2019, 11:22 pm | Fair 49º


Paul Suding: The Basics for Buyers Considering Short Sales

It's an option for getting a great deal, but it requires patience and legwork

There are new rules regarding short sales meant to improve the experience for both sellers and buyers, but the technicalities and legwork can overwhelm even the most savvy. Of course, that’s where the experienced Realtor shines, handling the paperwork and the phone calls, leaving you to focus on your move.

Keep in mind that if you’re considering buying a home in a short sale, you can and probably will get a great deal. But it would also be wise to expect little or no flexibility from a bank that is agreeing to accept a price lower than what the sellers owe on their mortgage.

And most importantly, if you are buying a short sale property, you must have patience — patience with no guarantee of the outcome!

When the banks review short sales, they must justify their decision to approve of the lower payoff. To start with, the purchase price, if accepted by the bank, must meet stringent appraisal requirements.

Another critical component of a bank’s review of short sales is the hardship level of the seller. If the seller can actually afford to make the payments, owns other real estate or otherwise does not qualify with a bank’s hardship requirements, the bank will disapprove of the short sale — leaving a buyer without a house to buy.

As a buyer in a short sale, it is important to first understand and grasp “what realistic expectations” you can have of the bank in this situation. It’s slightly different in every case, but there are definitely clear consistencies with how banks handle short sales. There are also certain steps and precautions that a buyer can take to reduce the risks and long waiting periods as well as bring a little more assurance to actually closing their escrow.

Realtors in our community have spent thousands of hours negotiating, navigating and closing short sale transactions during the past several years.

A short sale is often not the smoothest path, but with the guidance and expertise of a trusted professional, there will be fewer bumps and less surprises in the journey.

Paul Suding, a real estate agent with Cool Santa Barbara Homes and Village Properties, is president of the Santa Barbara Association of Realtors. He can be contacted at .(JavaScript must be enabled to view this email address) or 805.455.8055.

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