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Phone: 979-693-0201 Email: [email protected]

Myke Leatham | Brazos County Realty

Myke Leatham | Brazos County Realty

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How to Buy a Short Sale Property

September 7, 2020 by Myke Leatham

Have you heard about short sale properties? Maybe you’ve been told that they offer a wonderful opportunity to buy a great home and become a homeowner at a discount, or you may have been told to steer clear of short sales because of the hassle. No matter what you have heard it’s important to note that purchasing a short sale home is a very different process than traditionally purchasing a property that is listed for sale. There are very few short sales that are completed within 30 days, and the process can be tricky and frustrating. The main benefit of buying a short sale property is that you can get a steal of a deal on a great home. 

Before we get into how to buy a short sale property in Bryan College Station, TX let’s take a look at what a short sale is. A short sale can be compared to a foreclosure home, but they are not the same. When a home is available at a short sale, the bank or the mortgage lender will agree to allow the current homeowner to sell the house for less than what they owe. In order for a home to be considered a short sale, two things need to happen:

  • The homeowner is extremely behind on payments and won’t be able to catch up
  • The housing market is suffering and has significantly gone down so that the house is worth less than the remaining balance on the mortgage

In most cases, the lender and the homeowner would prefer to go through with a short sale process in order to avoid a complete foreclosure. 

A common misconception when it comes to short sale homes is that many people believe the lender would like to get rid of the home as fast as possible and move quickly in order to get as much money back as possible. The truth is that banks and lenders will take their time in order to recover their losses as best they can – just because a property is listed as a short sale doesn’t mean that the lender will accept your offer, even if the seller agrees to your price and terms. Although potential buyers will negotiate with the homeowner throughout the short sale process, all of the details must be reviewed and approved by the lender in order for the sale to go through. This is what makes the process so unpredictable and lengthy – everything has to be approved by the lender even if the homeowner and buyer agree on their own terms. 

Before you get excited about the opportunity to buy a home below market value you need to pick up the phone and call your real estate agent. Your agent will be able to look into the property and research the details behind the short sale that they can then share with you. Here is a quick breakdown of the process that takes place during a short sale transaction:

  • The homeowner initiates a conversation with their real estate agent and lender about the possibility of selling the property via short sale. The owner will have to prove to the lender that they can no longer make payments towards the mortgage and that they have no assets to sell that would help them catch up on the payments. 
  • The agent and homeowner list the property for sale, and eventually put together and execute a sales contract with the interested buyer. Remember that even if a contract is executed this does not mean that the sale will make it to the finish line – the lender has to approve the price and terms.
  • The lender will review the sales agreement and either approve the offer, reject the offer, reject the offer but outline what they would agree to or simply choose not to respond at all.
  • Once the lender responds to the sales agreement it’s back to the buyer to either accept or reject the new terms outlined by the lender. If the contract is approved, then the sale will continue and eventually close, and the home will be transferred over to the new owner. The lender will receive the proceeds from the sale and release the original homeowner from their mortgage loan, even if the full balance was not paid off by the sale of the property. 

If you are considering buying a short sale property in Bryan or College Station, here is a more in-depth outline of what you can expect throughout the process:

  • The first step is to find the property that you are interested in. Whether you come across a short sale while you’re looking for homes for sale or if you are specifically searching for these types of opportunities, you should not be doing it on your own. Working with a qualified and experienced agent can make all the difference between a smooth transaction and a difficult and frustrating experience. An agent will check the title, find out whether a foreclosure notice has been filed, determine how much is owed to the lender and gather additional information to help you put together a competitive offer. Our team at Brazos County Realty has more than 25 years of experience in the real estate industry and will gladly offer up our knowledge and expertise to guide you through any real estate transaction – no matter how complicated it may be!
  • Unless you are planning on paying for a short sale home with cash, you will still need to go through the steps of getting approved for a mortgage. If you don’t have financing secured, then the lender will most likely dismiss your offer and you’ll miss out on the home. Getting pre-approved is a relatively quick and easy process – most lenders can verify your credit and financial information within a day or two. Once you submit the paperwork and you get pre-approved the lender will write you a letter that you can use to make a credible offer on a home. 
  • When you are ready to make an offer on a short sale home you need to make sure that it is competitive – your real estate agent will be there to guide you and help you put this together. A good offer on a short sale home includes:
    • The purchase agreement that will be signed by you and the seller
    • The earnest money deposit to show that you are a serious buyer
    • The pre-approval letter from your lender, unless you are paying all cash
    • A comps package for similar properties in the area to show that your offer is strong
    • Proof of funds showing that you have enough money to purchase the home and make mortgage payments if you are getting a loan

Putting together a low offer will not work in your favor – remember that everything has to be approved by the lender that holds the mortgage on the home even if the seller accepts your offer. Underpricing is the number one reason that banks will reject offers on short sale homes. 

  • Make sure that you and your agent put a list of contingencies together – these are conditions that must be met before the sale closes. For example, state how long you are willing to wait for short sale approval, the amount you will pay in closing costs, how many days you need to complete a home inspection, etc. 
  • Keep in mind that short sale homes are sold “as is.” Unlike in a regular real estate transaction, in a short sale you can’t ask for credits from the seller or for them to lower the price if you uncover issues that will be expensive to repair. This doesn’t mean that you shouldn’t get a home inspection, you should always get a thorough inspection from an experienced inspector because this may uncover deal-breaker problems that may change your mind about going through with the sale. 
  • Short sales usually take longer to close than a traditional sale – you can expect an average of 60 to 90 days for a lender to approve the terms of your offer. There are so many variables that can happen during this process that can extend the time it takes to complete the transaction. This is why it is important to work with an agent who is experienced in short sales so they can manage your expectations and guide you through the process. 
  • There are various issues that can come up during a short sale, but some of the most common ones include:
    • The bank will accept a competing offer
    • The seller backs out of the deal
    • The seller owes multiple debts to different lenders, and the junior lender (smaller debt) will block the sale

Finding a short sale home can be difficult to begin with and the process of purchasing it is also lengthy and unpredictable. Despite these challenges, if you make it to the finish line then you know that you got a great house at an incredible price. If you are interested in learning more about short sale properties or are in need of a real estate professional to guide you through a short sale, please contact us. 

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Category: Blog

About Myke Leatham

I’m so glad you found me – your College Station and Bryan, TX real estate source! When you choose to buy or sell a home in College Station/Bryan, TX or other surrounding areas using our expert services, you will receive a free consultation to determine your needs, free listings, and free reports sent to you by email. These weekly reports will show you how hard the members of my team are working to accomplish your property goals, and we guarantee the best service and consultation you have ever experienced. You’ll find the best community information for the College Station, Texas region right here.

It’s nice to know YOUR Realtor will still be of service after the sale.

Experience Counts: Broker/Owner of Brazos County Realty
Over 25 years of sales experience. With past ABR, GRI, CRS, & Epro designations.
Continuing education in real estate: Education is paramount in an ever changing industry like Real Estate. Myke has taken over 1000 hours of real estate specific courses which include but are not limited to: Residential Appraisal, Marketing, Law Contracts I & II, Finance, Residential Inspections, Principles and Practice, Law of Agency, Code of Ethics, Bankruptcy/Easements/Surveys/and Probate, Home Warranties, 1031 Exchanges and hundreds of hours of extensive real estate training.

Reputation: SALES LEADER since 1998; Top Producer 2000 through 2009. Listed among the top agents in the county. Consistently ranked among top realtors for total sales volume out of 900 realtors for commercial and residential real estate in the Bryan/College Station, TX area. When Myke represents buyers, she presents all viable options to her clients, including those properties that are not officially listed, but could be available for sale based on her inside information. Her expertise lies with investors and marketing homes of all price ranges in College Station/Bryan to local, national and global buyers, across all major media channels and through her extensive, personal network of contacts.

Myke is among the top 1% of all Realtors in North America!
She has earned the Designations of ABR (Accredited Buyers Representative), CRS(Certified Residential Specialist), GRI (Graduate of Realtors Institute)CHMS (Certified Home Marketing Specialist), and E-pro (Certified Internet Professional)
Fewer than 3% of all Realtors nationwide earn these certifications. They are not only a symbol of Myke’s commitment to this business, but these designations are your assurance of a skilled, trained real estate professional.

Myke is a consummate real estate professional who not only understands the art of deal-making, but also the art of relationships. She makes the process of buying and selling homes an uplifting and fun experience. She has a tremendous appreciation for Bryan and College Station, its rich history, and Texas A&M traditions having lived in the area for 25 years. Her knowledge of Bryan/College Station’s real estate market and market trends is unparalleled. Having been personally involved with clients through their remodeling, purchasing and selling processes, she knows intrinsic quality and value when she sees it. When she doesn’t see it she lets her clients know, without hesitation.
Myke’s proven track record and affiliations in the field of real estate demonstrates her high level of professionalism.

* High energy and enthusiasm
* Aggressive marketing
* Expert negotiating skills
* Ability to listen and ascertain customer’s desires and needs
* Fun to be with
* Internet savvy
* Because Myke is an experienced investor, she quickly helps her customers locate and define good business opportunities. No one likes the feeling of being ‘sold to’ so Myke provides as much information as possible to help you make the right decision.

Personal Commitment:
I am prepared to go the ‘Extra Mile’ for you, because I understand the financial and emotional significance of purchasing and selling your home. I will carefully listen to your desires and arrive at a workable plan. I believe sensitivity, listening, and service are important keys to success.
Whether you are buying or selling a home or you are just curious about your home’s market value, I’d be happy to provide my market expertise and intelectual property without obligation, or meet with you to evaluate your home for future reference. I want my customers to have a great time and enjoy the total process of purchasing or selling property. It gives me great pride when my customerspass my name on to their friends and family. I will continue to work hard to make sure critical information is available at www.AggieRealEstate.com and I invite all interested investors to search my site for cash flow opportunities. I will dedicate my time and talents to helping you achieve your goals. It is my goal to make your buying and selling experience extraordinary. Look closely and you’ll see how much I love meeting and working with people. You’ll experience the difference in working with an experienced and dedicated professional.

Personal information:
Michelle goes by ‘Myke’ and is the proud mother of 6 children – 3 girls and 3 boys. Her husband is David Leatham. They met at Brigham Young University. They have been married since 1977. David is a finance professor, and Associate Head over graduate studies in the Agricultural Economics Department at Texas A&M University, and speaks fluent Spanish. They have lived in College Station since 1983 and loved every minute of it. Myke loves to quilt, sing, swim, ‘sing’, bake bread, ‘sing,’ garden, ‘sing’, sell real estate, and ‘sing some more’ :-). Family, church, and real estate consume most of her time. Truth, honor, integrity, kindness, loyalty, gratitude, and service are very important words to her.

Slogan: ‘Let Myke Help You With Your HOMEwork!’

Referrals: The highest compliment I can get is when you pass my name on to others or post a kind remark on the internet. When you send your friends and family my way, I’ll always provide them with the highest quality of service that I know you would appreciate. Thanks in advance for all your support and friendship.

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