Lee Davenport, SFR 404.444.5777

You may be a buyer who has heard the horror stories associated with a Short Sale and may be fearful of them. However, there is no need to be as Short Sales Can Be Your Best Buy. The key to navigating a Short Sale is understanding the oddities associated with purchasing a Short Sale to minimize your frustration with the process. As with anything in life, when you have the proper expectations, you are better able to cope with the challenges that may arise.

Here are some things to keep in mind with a Short Sale:

1. In your initial offer, ask for your due diligence period to begin after the Short Sale has been approved.

Why pay for inspections and appraisals only to find out that the Short Sale Bank is not going to approve the purchase price or other terms of your contract? Request in your initial offer that your due diligence period (which is the time for you to have your inspections and appraisal done) begin after the Short Sale approval has been issued.

2. After receiving an executed contract by the Homeowner/Seller, expect the approval for a non-approved short sale to take any where from 2 months to 6 months depending on who the Short Sale bank is and how experienced the listing agent is.

For some of the banks that are using Equator (or a similar system) and have streamlined their processes in the last year or so, you can expect your turn-around time to be on the shorter end of that scale (2-4 months). In some cases, even despite the bank’s short sale system, if you have an experienced or just aggressive & responsive listing agent (who is staying in contact with the Short Sale bank at least weekly and sometimes every other day), then you can also be hopefully to receive an approval back quicker.

While you are waiting for the Short Sale to be approved, keep looking at what else is on the market. If something happens where the Short Sale is not approved, if you have kept looking and made other offers, the time lost is minimized.

3. After receiving the approval from the Short Sale bank, expect to be required to close in 30 days.

I know this seems insane that you may have just waited 4 months to get an approval but now you only have 30 days to close (and in some fortunate instances you are given 45-60 days to close) but this is the reality in many cases that you should expect. If you are paying cash, then this is not much of a challenge but if you are getting a loan it is vital to get your lender on board with this timeframe really when you first sign the contract to purchase the home. This way if there are any special documentations needed (i.e. a gift letter if you are receiving a down-payment gift from parents, student loan deferment information, credit inquiries, etc.), your lender can already have that information gathered as to not cause a delay. Unfortunately, many times the Short Sale approval is issued just 30 - 60 days before the home is schedule to foreclose so time is truly of the essence for you to get to the closing table.

4. Prepare to pay for repairs required to close.

With most Short Sales, the Seller is not in the financial position to make any repairs and the Short Sale Bank may not be willing to make any either. However, especially if you are getting a loan, their may be repairs required for you to take title of the home. If possible, have a mental budget of what you are willing to spend when making an offer on a home in case their are any required repairs once your inspections and appraisal are completed. By having a mental budget, the shock value will not be as great if repairs are required.

If you do not have additional money to pay out of pocket for repairs, consider if the repairs can be made using a renovation loan (such as the 203k Rehab Loan, etc.). Ask your lender about the possibilities of this while you are making the offer so that you can set your expectations properly, especially if the home has obvious repair needs.

5. Ask for more but expect the Short Sale bank to pay only 0 to 1% of the purchase price towards your closing costs.

I highly recommend in your offer requesting the total amount of closing costs customarily paid in your area for closing cost (in Metro Atlanta 3- 6% of the purchase price is standard), however, remember this blog entry is about helping you set proper expectations. Therefore, although you have asked for the maximum allowable amount, recognize that the Short Sale bank may only give you 1% (and 0 in really bad instances). Plan for this and even change your initial offer amount if need be so this while not cause you to lose your fantastic real estate find.

**Buyer beware - if Bank of America is the Short Sale Bank, they are know to only concede 1% in many instances so try to determine what is standard for the Short Sale bank you are working with while you are presenting your offer.

6. Prepare for the Seller to need a few days after closing to move out of the home.

For many Sellers, the Short Sale process is so disenchanting that they have lost hope that their home will ever sell. So imagine their surprise when not only have they gotten the Short Sale approval, but the buyer has actually hung around to the end and is ready to close. In some cases, the Seller may be scrambling to move so ideally advise your intentions of still closing once you have completed your due diligence period.

7. If the Homeowner/Seller is present at the closing, expect this to be bitter-sweet.

Sadly, you know that your great deal is predicated upon someone’s loss, who may be sitting directly in front of you at the closing table. But know that you have helped the Seller avoid foreclosure and start a new chapter in his/her/their life with one less burden.

For more information on purchasing a short sale, feel free to contact places2love@gmail.com with questions. Happy house hunting!

In this real estate market, there are many fantastic deals to be had for the real estate Buyer but not just with foreclosures. Despite the horror stories you may have been told, Short Sales can sometimes be your best buy and here are 5 reasons why:

If you are new to investing in Atlanta's hot real estate market, check out the latest episode with critical tips for your success.

About The REAL Houses of Atlanta

The American dream - traditionally it has included homeownership. But far too many of us experienced with the real estate bust a rude-awakening from the dreams of grandeur. Real estate, however, is not our enemy but how we obtain and dispose of it needs to be based in the now-present reality. This is a journal of purchasing, selling and renting REAL houses in metro Atlanta - no fluff, no props, no makeup just real houses in a real city.

Welcome to The REAL Houses of Atlanta!

Congratulations on making a great home purchase in 2011 (since real estate prices and rates are at historic lows, I know you received a great deal )! Now that you have landed a great piece of Georgia real estate, here are some tips to be sure to do in 2012 to maximize your benefits.

FILE FOR HOMESTEAD EXEMPTION

Homestead exemption - ahhhh one of Georgia’s remaining tax perks despite threats to remove it. Homestead exemption allows real estate owner occupants the ability to receive a reduction in their property taxes. Here’s the caveat - most counties in Georgia require that you file for homestead exemption between January and March of the New Year in order to receive this benefit. It is not automatic and if you miss the deadline, you have to wait until next year so do not delay. Email places2love@gmail.com for specific deadlines in each Georgia county.

APPEAL YOUR PROPERTY TAXES

I know at closing you probably gasped at how much the taxes were assessed at despite you paying a fraction of that assessment for the real estate purchase. For the New Year, contact your county’s tax assessor office (most have websites and online forms) and complete the form to appeal your taxes so that the assessed value reflects your purchase price and ideally you can pay less in property taxes. Moreover, I recommend (and I do this personally) appealing your taxes any and every year that you notice homes in your neighborhood are still being foreclosed so that you can attempt to get a price reduction. The good thing about this is you do not have to wait for the county to make a reduction, you can request one.

STORE YOUR TITLE DEED

Within 6-8 weeks after your closing, you should have a copy of the recorded deed for your new property. With all the hoopla of the holiday season, you may not have received it but take some time to search for it. If you did not receive it, then contact your closing attorney and notify them to see if they can track it down and even have a new one issued. One you have the recorded title deed, be sure to store it, along with all of your other documents from your closing like your title insurance, in a secure place like a safe deposit box, etc. This is more of a long-term savings but savings nonetheless.

If you have heard of NACA but have had a hard time getting through the process, the 2012 AMERICAN DREAM CONVENTION here in Atlanta may be just for you! NACA (Neighborhood Assistance Corporation of America) will be holding its first ever AMERICAN DREAM CONVENTION at Atlanta’s Georgia World Congress Center from Tuesday, January 10 to Sunday, January 15, 2012 from 8 a.m. to 8 p.m. daily. For NACA, this is a first because it is catered to both homebuyers that want to take advantage of NACA’s low rates and for current homeowners that are struggling to pay their mortgage.

For current buyers, you can obtain comprehensive counseling and access NACA’s mortgage with no down payment, no closing costs, no fees, no perfect credit required and everyone receives the below market fixed interest rate (3.5% 30 fixed as of 12/21/11). Although this may seem to good to be true, NACA really does offer this but for many buyers in the past it has been difficult to complete the required steps. But now, NACA’s AMERICAN DREAM CONVENTION will make this a reality for many - so if you have been frustrated with the process in the past, try this convention. Moreover, member’s who are currently in the process are welcome to attend to complete their files. As you can imagine, there will be limited face-to-face counseling appointments so sign-up now (click here to make an appointment).

For current homeowners with an unaffordable mortgage, you can meet with a Home Save Counselor to determine an affordable mortgage payment. Then meet face-to-face with your lender, with a NACA Negotiator, to obtain an affordable solution. Many homeowners will leave with a same day solution reducing their mortgage payment by over $500 a month and some by over $1,000 with interest rates permanently reduced to as low as 2% and more and more homeowners obtaining principal reductions (click here to register and review the items needed). Pre-registration allows your lender to review your file in advance to be better prepared in providing an onsite solution.

Happy House Hunting!