MN Real Estate

Buy a short sale home

Buying Short Sale Homes | Tips | Info

buy a short sale home

 Short Sale and Foreclosure Buyer Resources!

When buying or thinking of buying a short sale, you should be well informed. We have prepared this information to help Twin Cities buyers save time, money & frustration when purchasing short sale homes in Minnesota.

1.  Be patient – Set time expectations BEFORE you start looking at homes – most short sale deals fall apart because timing was not clearly explained up front.  If you don’t have 3 -5 months to purchase a home and get a great deal, don’t look at short sales or foreclosures.

2.  Offer fair market value for the property – Short sales and foreclosures generally sell for less money than retail properties.  However, in general lenders want fair market value for the property.  If you really want the property, be realistic and submit your best offer up front, don’t send in a low ball offer and expect it to be accepted just because it is a short sale.

3.  Choose an agent with experience in short sales – make sure your agent knows the ins and outs of short sales and can help you understand and navigate through the process.  Make sure they are willing and can work with the listing agent through any issues that may arise. If the agent or your agent hasn’t closed at least 10 short sales in the last year they are most likely not up to date with all current bank procedures and requirements. Also, if they say they will negotiate for you themselves that is a red flag. Most successful short sale real estate agents use a professional third party negotiator or an attorney to perform the negotiations with the banks. They know a REALTORS® time is best spent doing real estate, not sitting on the phone on hold for hours trying to get through to a bank’s loss mitigation department.

Short sales and foreclosures are not the typical sale. 

 Allow 90 – 120 days to get approval on a short sale.  

Then add an additional 30-45 days after approval for closing.

 Generally, foreclosures will need 45 – 60 days.

4.  Show that you want the property – make an effort, do something that shows you want the property.  If you have offered fair market value, you have a fair chance, consider providing earnest money or doing your inspection immediately.

5.  Be a qualified buyer – the lender is going to require proof that buyer’s are qualified to purchase the property.  Have a solid pre-approval and/or proof of available funds if you are a cash Buyer, such as a bank statement or investment account statement showing the funds are liquid and available.

6.  Be realistic – make sure you don’t ask for too much – review the MLS and ask only for what is offered.  Sellers are losing their homes, they are not willing to give away their belongings.  In addition, lenders may allow some money for buyer’s closing costs as part of the transaction – Keep in mind – 3% is generally the maximum, it could be less.

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WHAT IS A SHORT SALE?

When a home owner makes a request with the lender to agree to accept less than the amount owed on the home as payment in full, the process the seller goes through is known as a “short sale”.  This particular type of transaction can be very time consuming because the seller and the lender must agree to all terms and modifications of the seller’s mortgage obligations.

Often, people confuse the two terms “short sale” and “foreclosure” they are not the same thing.  A foreclosure is a situation where the home owner has defaulted on the mortgage and the lender takes the property.  A short sale is a negotiation between home owner and lender in an effort to agree to sell a property for less than what is owed.

When you decide to move forward in these types of transactions, it is crucial you work with an experienced Real Estate Professional, this will help protect you and inform you so you are able to make smart decisions.  MN Real Estate Options is proud of our Short Sale Queen, Vicki Schwartz.  

Broker and owner of the leading short sale and distressed property real estate brokerage serving the entire Minneapolis/St. Paul area.

  • President and CEO , December 2005 to present
  • A recognized leader in the distressed real estate field and multi-million dollar producer with over $9 million sold in 2010. Broker and co-owner of a real estate company with 10 full-time agents. Duties include management, marketing, lead generation, strategic direction, hiring and training of staff.
  • Led a team of 14 Realtors, 4 Negotiators and 2 Admins, specializing in REO’s and short sales, helping owners of distressed properties find mutually agreeable alternatives to foreclosure with their lenders
  • Frequent guest star of News talk 100.3 FM/ Fox News radio (formerly KTALK) on the All Things Real Estate Show – known as “The Short Sale Queen” of Minnesota
  • Preferred REO (Real-Estate-Owned) Broker for banks and lending service companies, providing full REO services such as BPO’s (Broker Price Opinions), Listing of properties, trash outs, evictions and repairs
  • Having experience with hundreds of transactions allows me to foresee problems and proactively solve issues before they bloom into a larger problem, or even before they happen at all.
  • Provide 24 hour turnover time and very accurate BPO’s
  • Experienced with evictions and laws pertaining to personal belongings
  • Have over 85% success rate on cash for keys negotiations
  • Rock solid support staff to handle day to day details pertaining to ordering utilities on/off, getting appraisers and workmen into properties, handling damage assessments, getting bids for repair work, securing properties and checking on occupancy status, etc.
  • Preferred short sale trainer, speaker and short sale guru for Minnesota Association of Realtors and Minneapolis Association of Realtors
  • Created and developed comprehensive training program for short sale Realtors, including automated transaction paperwork system
  • Engineered new marketing programs and methods for reaching out to distressed property owners