Okay, when going through the short sale process there are several components to factor in, such as how long as the short sale been in process or negotiations? Has the BPO (broker price opinion) been completed yet? Are there any outstanding liens on title that the bank may not pay off? As you read on you’ll understand that these are some of the keys in finding out a short sale property is worth going after.
Our first step to take, you need to find out how long the short sale has been in process or under negotiations. The main reason why in this particular situation is that you don’t want to put in an offer if the process has just been started. Most short sales from start to finish take on average to receive an approval letter is anywhere from 3-6 months. I’m not saying it couldn’t take less than that, and I’m most certainly not saying it can be approved by 6 months too, as I’ve seen some short sales take longer than 12 months. At this point, just make sure you check when the process begun, and you can make a sound decision with also adding in the key component below with in reference to the BPO (broker price opinion).
The second thing you need to take into accountability, is finding if the BPO (broker price opinion) has been completed yet within the process. It’s crucial to find this out as again if the BPO hasn’t been done yet you could be waiting a while to get an answer on your offer. If the BPO hasn’t been complete then you may be looking at a possible wait period of 90-120+ days depending on which bank the short sale is being negotiated with. Now, let’s say the BPO is complete, and the bank just needs an offer from you, then at most you may wait 30 days or a little bit longer. In order to find out where or what the BPO came in at, I would ask the listing agent. Most of the time the listing agent will not share this information with you as it’s their fiduciary responsibility to look out for their sellers best interest. You can however say, “is my offer anywhere near close to what the bank is asking for,” this is what I’d recommend and plus you can start off lower with your offer until you feel the listing agent may be providing with you a valid or accurate number to go off of.
Our third thing is for, any possible or outstanding liens due against the property. If there’s back taxes or homeowner association fees due the bank in most cases will pay these fees, however, if there’s any other outstanding liens owed on the property for example, mechanics lien, credit cards, auto loans, etc. the bank may offer a credit of $2,000 or more depending on their attitude for that day (no, really it depends on what the “note” holder is willing to allow). A simple solution for you to find this out is by asking the listing agent for the most recent title search or for them to go over it with you. If there’s a lot of liens that cannot be cleared then go on to the next property. You’ll more than likely be disappointed with the outcome as the bank as a certain amount they’re willing to pay out for other liens, and it may not be enough to satisfy for clear title.
I hope the above information has been helpful!