Buying a Short Sale: The Seven Steps to Success

So you’re buying a Laguna Beach home. Only this delicious property just happens to be a short sale. Great house, great price = great deal, right? The answer is yes – if you take the right steps.

Dave Csira, short sale specialist with our Coastal Property Experts team, has compiled these seven tips for your edification.  Follow them, and you’ll tremendously boost your chances of short sale success. Ignore them, and get plenty of padding for your tush -- you’ll likely be kicking yourself there repeatedly.

Seven Steps to Buying a Short Sale:

1. In most areas of life, patience is a virtue. In the realm of short sales, it’s an unequivocal necessity. Prepare to wait at least 60-90 days before you get some answers regarding your offer. If you’re itching to jump right into a property, jump as far away from short sales as humanly possible.
2. Be extreme in your due diligence. This means, know what dirty little secrets remain untold about your beloved dream home. What repairs will be required? Are appliances and other items (e.g. hot water heater, furnace, air conditioners) in working order? Hire a great inspector to identify future problems or expenses. Uncovering this info in advance will minimize headaches better than extra-strength aspirin.
3. Have your agent order a preliminary title report. Are there additional liens (IRS, Franchise Tax Board, judgments, back HOA dues, etc.?) This report will reveal all liens and other blemishes marring your magnificent Laguna Beach home. Remember, to be forewarned is to be forearmed.
4. NEVER, ever fall in love with a short sale property -- no matter how jaw-dropping gorgeous and irresistibly priced. Keep in mind, these properties are the ones most likely to be hampered by unforeseen problems – problems that could be real deal-breakers…and heartbreakers.  Far better to wait for the all-clear signal (formal approval letters from all lien holders) before committing.
5. You’re venturing into the realm of the unknown, so have plenty of cash reserves on hand to handle the unforeseen. Generally, we’re talking about 2% of the selling price.
6. Give ‘Em a Clean Offer.  Secure pre-approval status backed by a pre-approval letter. Also, reinforce yourself with proof of funds and proof of down payment. And for ultimate cleanliness, avoid requests for perks such as termite work, home warranties, and repairs. It’s far more advantageous to offer a lower price and cover these expenses yourself.  Basically, you’ll need to buy the property As Is, As Is – banks generally aren’t in the home repair business.
7.  Being second often wins the sale. Because short sales tend to drag on, the would-be buyer who submits the first offer frequently loses interest and backs out. If you’re in second position, you may be able to jump to position one and be there when the approval letter arrives.

If you’d like to learn more about buying a Laguna Beach short sale or any other Laguna Beach home, we’re ready to assist you. As the area’s premier coastal property experts, Hillary Caston & Associates can help you discover the endless golden opportunities here in the Laguna Beach Real Estate market. Connect with our team now at 949.922.8490 or hillary@thecoastalpropertyexperts.com.

Until next time…

Sunny Days and Smooth Sailing!