Avoid Short Sale Snafus When Buying a Livermore Home!

The Los Angeles Times recently produced a dour article about short sales, suggesting that these home purchases can fall apart without much ado. However, purchasing a home through a short sale in Livermore Valley can be accomplished without pain if you follow a few rules of thumb.

1. Short sales are not intended to be a better deal for the home buyer. They are simply called “short” because the home sale, at current market values, will not be enough to cover the seller’s outstanding mortgages.  Therefore the mortgage lender must approve the sale and agree to the loss.

Short sales, when priced wisely, should be in line with comparable homes on the market.  It doesn’t make sense to price a home below market if the bank is likely to reject it – no matter how many buyers take the bait.

2. As a home buyer, be sure that your mortgage pre-approval gives you enough time to consider a short sale. Stay in contact with your mortgage lender and obtain extensions, or re-qualify, as necessary. Keep your information updated and do not make major changes to your job or credit profile.

3. Because short sales involve highly motivated sellers, it’s tempting to lowball your offer – but if the bank refuses it, you’ve wasted your time and possibly alienated the seller. Make a respectable offer in line with the market.

4. As the Los Angeles Times article suggests, you may need to consider ordering the home inspection up front and paying for it out of pocket, if the closing timetable is too aggressive.  But in most cases you can negotiate a reasonable extension of the closing date. After all, it’s in the bank’s best interest to have the deal go through.

5. Livermore Valley home inventory includes a number of short sales, and it may not be possible to avoid them without significantly limiting your choices. Rather than fear a short sale purchase, work with an experienced real estate professional – like me – who understands these situations and can guide you through them.

The truth is, distressed property sales will be part of our Livermore Valley real estate market for years to come. New short sale policies are taking effect with lenders as of November 1, 2012, and we may see more short sales hitting the market as a result.  Some homeowners are leveraged too heavily with mortgages to have any other means of moving on, even as home values recover.

Let me help you with the home buying process in Livermore Valley! For the latest price trends, and for help with your real estate questions, contact me!  I have the local expertise you can trust for Livermore, Pleasanton and Dublin. Whether you are buying a home for the first time or for the tenth, I can provide the latest market data and the professional guidance you need.

John Kurtzer
Your Livermore Real Estate Expert
RE/MAX Accord

Livermore Real Estate
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