Preparing a San Diego Short Sale Offer to Purchase
If you decide that you want to write an offer on a property that is being sold as a short sale in San Diego, you need to understand that your offer will be quite different than most traditional offers (on properties not being sold subject to bank approval).
The first noticeable difference is that your offer to purchase will be subect to the San Diego short sale lender(s) approval. No matter how badly the seller wants to sell you that home (and no matter how quickly he/she wants to close the transaction) the entire transaction depends on whether or not the short sale lender(s) will decide to approve of the sale. As a buyer you want to make sure your offer is written in a way that allows you to cancel the offer at any time with no consequence.
Another difference you should be sure to include in your offer is how contingency time periods are handled. It's in the buyer's best interest to delay the start of all contingency periods (such as loan contingency, inspection contingency, appraisal contingency, etc.) until you have received written proof of the short sale lender(s) approval. This allows you to wait patiently without being required to spend money on an appraisal, inspections, etc. until you know for certain that the short sale lenders are willing to cooperate.
Having the right expectations is key to successfully purchasing a San Diego short sale. One important thing to understand as a buyer of a San diego short sale is how long you may have to wait to get an answer to your offer. Once the seller has accepted your offer, he/she will need to submit the offer to his/her lender(s). From that point, your waiting time could be two weeks to three or four months (or longer) until you hear from the lender(s). Your answer at that point could be yes, no, or maybe so. The lender may want to change certain elements of the offer, or the lender may decide not to approve of the short sale altogether. Be sure to talk with your San Diego real estate exclusive buyer agent up front about all of these matters.
Be sure to include a pre-approval letter from your lender to show the short sale lender that you are a qualified San Diego home buyer. Most banks will not even consider an offer from a buyer without a pre-approval letter. In fact, some banks want the pre-approval letter to be on bank stationary (as opposed to mortgage broker stationary). Prepare for this ahead of time. Also include a copy of your earnest money deposit check. You may be asked to deposit your earnest money deposit check into an escrow account right away, or you may be able to hold onto it until you receive approval from the short sale lender(s). Either way, the short sale lender will want to see a copy of the deposit check.
Your San Diego real estate exclusive buyer agent should prepare a Comparative Market Analysis to submit with the offer that justifies your offer price. If you envision that you may ask the lender(s) to pay for some repairs, then it would be prudent to submit photos and repair estimates with the offer. Banks tend not to like it when buyers ask for a better price or more money for repairs after an approval has already been granted.
Your San Diego exclusive buyer agent will prepare the offer (and any addendums that apply) for you to review and sign. Ask your agent to explain how the offer verbiage protects your interests. Once your offer has been accepted by the homeowner, you want to make sure that a complete package is being submitted to the short sale lender(s) for approval. You should be sure that your San Diego buyer's agent or the listing agent prepares a seller net sheet or a HUD-1 (prepared by a title company or an attorney) to submit to the short sale lender(s). Also, be sure that the listing agent has the homeowner's portion of the short sale package prepared to submit with the offer. The key here is to submit a complete package one time! If important documents are left out, your San Diego short sale will take even longer to get approved.
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. Call Justin at (858) 437-2662 or E-mail.
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