Tips for Buying a Short-Sale House in California

Thinking of buying a short sale home in California? Here are some tips that can make your purchase as smooth as possible.

Knowing about Short Sale:
You need to know more about short sale and difference between short sale and other sales (regular sale & reo sale). Whether it’s the right buy for you or not. If you want to buy as soon as possible and cannot wait couple of months then short sale is not the right choice to write an offer. But if you can wait couple of month then look for short sale homes also in your search criteria and ask your agent to show short sale listings also.

Get Pre-Approval:
This is important whether you are writing offer to short sale or other type of listings. Pre-approval will make your offer stronger and gets higher priority than others who are submitting without pre-approval. So, make sure you are pre approved with a good lender before your home search.

Time Frame:
It takes time to know the final approval from the seller’s lender after you submit your offer, may be 1 month, 3 months or more. You need to have patience to wait that long for your dream home.

Offer Acceptance:
Even though, seller accepts your offer, doesn’t mean that your offer has accepted and you can move forward with that offer. Once you submit the offer, the seller’s agent forwards to the seller’s lender for final approval. The lender may accept it, reject or counter back to you with their price based on their own appraisal price.

Other Liens:
If other liens like HOA, tax liens and others where the seller owes to those lien holders, could also be a hindrance to the final approval of the sale. Most of the time, bank approves to pay all the liens but sometime they don’t, in that case either the seller or buyer or both needs to contribute to get that good deal.

Writing Offer:
Write a good offer based on the market value, don’t think that it’s a short sale, you can write a ridiculously low offer and bank will accept it. No, once you submit the offer, bank will also do their part by ordering appraisal to check the market value. They compare the appraisal value with your offer price. If you really like the house then write your best offer so that you can have higher chance of getting that house. Now, write only for those houses which you really like and not all short sale listings.

Check Listing Agent:
Check whether the agent representing the seller has experience in short sale or trained /certified agent in short sale, this shows that the agent can handle the short sale correctly from the beginning itself from submitting the package to getting approval from the lender. If the buyer side agent is also experienced is short sale then that would be a plus point to the buyer. You can find a licensed California real estate agent at Realtor.com or by going to any of the major real estate firms in your area to interview an agent. Find an agent with a diverse marketing plan who has a proven track record of success.

Follow up:
You need patience, once you submit your offer, don’t call your agent every other day for the status. The lender takes time depends on their work load to order appraisal or BPO (Broker Price Opinion) to determine the market value. This process itself sometime takes 30 days and another 30 or more days for final approval. But make sure, you ask your agent to follow up with the listing agent every other week or so for the latest update if any.

Backup Offers:
If you really like the house and somebody already wrote an offer, then ask your agent to submit a backup offer, if they are accepting the backup offers because sometimes the first buyer may walk away from the deal due to long waiting period or due to some other personal reasons.

Terms & Condition:
All the short sale listings are “As-is” sale, but that doesn’t mean you have to buy a house without any inspections. You have the right to do all the inspections but the seller will not fix anything if there’s any repair. It depends on you whether you are satisfied with the inspection reports and repairs(if any).

After getting the approval letter from the lender then work on to remove your contingencies(inspections, loan approval) and submit your initial deposit to the title within the specified time so that you can close the escrow on time and move to your home. Buyers, you can get a deal with a short sale, but it comes at a price. If you have the time and the patience you could be rewarded handsomely.

Southern California Real Estate

Southern California real estate is on a high. This surge in demand has graced the commercial as well as residential segments. The revival is coming after the great bubble burst of 2008 that sent the sector into a cold slump.

There was a 20 percent increase in transactions in May 2012 and the median price became a 20-month high. According to Jon Walsh, president of Southern California HomesDataQuick, “the spurt in sales for Southern California is driven by low interest rates and an improved economy.”

Thus home sales went up in San Diego County and Los Angeles County with the median price for houses increasing 5.4 percent in the whole of South California from $280,000 to $295,000.

As things are changing there is jubilation in the market with many agents and consultants asserting that the market is in the pink of health now and the emerging market signals are trustworthy.

Attractions of Real Estate

The Southern California real estate market holds many attractions. They include:

• Excellent Locations
• Wonderful Weather
• Entertainment Options
• Good properties
• Many Picnic hotspots

A buyer will never regret the purchasing of real estate in California. There are multiple reasons for it. It gives an escape from cold weather conditions unlike the coastal regions elsewhere. Most people prefer warm climate. Southern California can fascinate any visitor with its warm weather and pleasant surroundings. The scope for unlimited entertainment is plentiful by way of San Diego’s sports festivities, famous museums and good zoos.

Good property mix is yet another attraction. Besides expensive properties southern California also offers options like condominiums closer to the beaches and ocean. This is affordable and is quite a value for money option in housing.

Make a Profit

The analysts and brokers are encouraging buyers by citing at least three reasons to show the revival as genuine.

• No cheap loans floating in the market
• Housing Inventory is very low
• Reduction in distressed properties

Those looking for San Clemente Real Estate exciting properties are now up for grabs. San Clemente, lying in the southern part of the Orange county is extremely business friendly and has headquarters of many business corporations.

Investor Confidence

A survey conducted by Market Research Group Trulia, is reassuring. It says 60 percent of people expect prices to rise in the next year. Rising prices are also swinging developers into action to create finished properties.

Economic Recovery

The indications of a housing revival are there. If the rising property prices can drive the construction sector to the erstwhile glory, the housing market will become the engine of economic recovery. The rising house prices can also facilitate mortgage- modification in the medium and long term.

Riding the customer optimism it is not out of place to believe that rising prices may finally peak in the next 10 years. It is very pleasant to see the battered markets like Las Vegas and Sacramento seeing soaring prices. Certainly this is good news for all!