Short Sales or Quick Sales are a part of the Long Beach, Ca Real Estate market. A short sale occurs when the property is trying to be sold for less than the trust deed that the bank has on the property.
Purchasing a short sale is different than purchasing an REO (Foreclosure). Here are 4 tips on how to have a successful purchase of a short sale:
- Be Patient! - The bank has to approve the short sale. Unlike an REO where the bank already owns the property, in a short sale the bank has to decide if they are comfortable losing a certain sum of money. The bank must determine if it would be cheaper to go to foreclosure than accept the offer. For this reason, it can take many weeks (sometimes 6 weeks or more) just to get an approval of the short sale. The total process of purchase can take 3 months.
- Deposit Amount - You will need to have a deposit that is at least 1% of the purchase price of the property. The bank wants to see that you can complete the purchase.
- Complete Package - Have as much documentation as possible. In other words, include FICO scores, bank statements, and a pre-approval letter to show you are prepared.
- Closing Costs - You can still get closing costs from the bank, but you will be limited at 3%. Be prepared that the bank may come back and knock that amount down as they are reviewing your offer.
As you are working with your Long Beach realtor, realize that they may be hesitant to submit an offer on a short sale because often the realtor commission gets cut. Be persistent and be open that you may need to look for other properties in case your short sale does not get approved.
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