Are you a Santa Cruz real estate investor or home buyer who wants to buy a short sale in order to get a great deal? Unless you’re a seasoned short sale buyer, it’s not as easy as you may have been told. In fact, there are so many steps to the process, this blog post only covers the first five.
1. Hire an experienced Santa Cruz real estate agent. The first thing you want to do is find a real estate agent who is knowledgeable about buying short sales in your local market. Unless you’re already a short sales expert, you need an experienced agent to guide you through the process because most homes that are listed as short sales never even make it to closing due to problems encountered along the way. In fact, some stats show that as few as 1 in 10 short sales make it all the way to closing.
2. Get your financing in order. How are you going to pay for the property? Before you do anything else, have your financing in order. In a short sale, the lender often moves at a snail’s pace, but you have to be able to move quickly. Once an agreement is worked out, the lender may require that you close in as few as 20 days. That’s not enough time to shop for a mortgage.
3. Search for short sales. Your agent will have access to all the homes up for sale as short sales. Let him or her help you sort through the homes to identify those that fit your needs and are most likely to make it to closing.
4. Research the short list of short sales. Have your real estate agent (see how much work this agent is doing for you?) research the short list of short sales you’re interested in to find out how many mortgages each of them have and how much money is owed. If you find that there are a lot of loans against a property, your best bet is to move on and find a short sale with only one loan. Additionally, your experienced agent can steer you away from homes with lenders who are difficult to work with on short sales.
5. Be prepared to pay close to market value. This may sound ridiculous to you because you’ve heard that short sales are an amazing bargain. Yes, some short sales are priced very low, however, that does not mean the lender will accept that super-low price. Typically, the short sales that actually make it to closing are going to be priced close to current market value. Have your real estate agent research pending sale comparables to determine what the current market value is for the short sale you’re thinking of buying.
If you’re interested in investing in Santa Cruz real estate, I can help you find the true bargains, whether they’re short sales, foreclosures or just well-priced real estate. Give me a call today at (831) 662-6522 or email me at Lauren@LaurenSpencer.com.
For more information, please visit my website at www.MySantaCruzRealEstate.com.