When searching for Atlanta real estate online you'll notice a few properties listed as short sales. These properties are a little different than a normal home and it takes an experienced real estate agent to ensure you get to closing as they are subject to a bank (third party) approval. The short sale process can be long and grueling so be prepared to get dirty! Here are 5 things you need to know before buying Atlanta short sales:
The Listing Price Doesn't Tell The Whole Story
If short sales are so difficult, why do so many people want to buy them? The answer is listing price. Short sales are normally listed below true market value causing quite a ruckus with home buyers. It's typical for a buyer to see a short sale priced lower than comparative properties and the excitement overwhelms them. They figure the listing price is where the home will sell, but not so fast Charlie!
It's well known in the real estate industry that short sales are originally priced below market value to entice buyers into a bidding war. This tactic ensures the sellers receive enough offers to choose the one with the best chance of making it to closing. Don't be fooled when looking at short sales. Banks (third parties) have the final say in what price they are will accept. Just like your mom warned you when you were younger, it if looks to good to be true it probably is. This brings me to my next point.
If You Want To Win The Bid Do A Market Analysis
Most short sales receive multiple offers and it takes a through understanding of the market to get your offer accepted. You need to understand what the true market value of the property is if you plan on winning the bidding war for that perfect home. You need the expertise of an experienced agent to help you determine what comparable properties are currently selling for.
Before writing an offer make sure to have your agent do a through analysis of the property. Check to see how much the homeowner owes on the property, determine if the listing price is to low, and get to know the neighborhood. If you don't want to lose out on the home, be sure to offer close to market value, otherwise the bank won't give you a second glance!
Time Is Of The Essence So I Hope You Have A Lot Of It!
Short sales take a long time from start to finish. The average time-frame for a short sale to closing is between 3-6 months! Banks are the thorn in our sides as real estate agents due to their silly rules when it comes to approving a short sale offer. They take their sweet sweet time and there's almost nothing you can do about it. Calling them everyday does nothing but upset the asset managers so don't be pesky, it will only draw out the process.
When buying a short sale be prepared to wait. Banks are currently overwhelmed with record numbers of defaulted loans, foreclosure proceedings, loan modifications, and short sale requests while being woefully understaffed. The banks have created many different divisions to handle these tasks making it difficult to talk to a customer service rep who knows the whole story. We all know banks aren't in the business of helping the consumer these days so take a deep breathe and find a seat.
If you have the patience and a great real estate agent like Tina (hint-hint!) short sales can be just the thing you're looking for. But, be ready fight multiple bidders, do your homework on comparable properties, and be patient! Short sales can be a great way to gain instant equity but only if you're ready to play the game. Good luck!
Lisa Udy is the broker/owner of Platinum Real Estate Group and has been helping buyers since 2001.