As we near the end of 2011 and head into 2012 here in Phoenix AZ it’s highly likely that you’ll come across some great deals as you sort through the hundreds of homes that fit your wish list and that fit what you qualify for financially. Chances are that some of the homes that you’ll have the option to purchase will be through a short sale. Short sale homes are commonplace in the AZ market and will continue to be through the foreseeable future. With this said, what follows is a list of a few items that if you take them to heart you’ll have a better experience as you navigate through a Phoenix short sale process.
First, if you come across someone looking to have you pay them upfront – run. There is no legitimate reason to be charged upfront for wanting to purchase a short sale. The reasoning is that it takes more time on the part of the real estate agent – but in the end they still make their commission from the home seller.
Figure out your financing. For example, if you are a VET and you want to take advantage of your VA loan eligibility and the very competitive low VA rates you should check into your options ahead of time when it comes to a short sale. This is true for any type of loan – you will need to check your options up front before you get yourself committed to a short sale only to find that you either don’t qualify from a financial perspective, or because the home won’t properly appraise to get the mortgage.
Inspection period. In Arizona, you get 10 days for your inspection period to get all the home inspections you want on the property to make sure the home is in sound condition sufficient for you to purchase it. You will have to pay for the inspections – and you should get your own as you don’t want to leave your financial future and future homeownership in the hands of the home seller. At the very least talk to your short sale agent – perhaps CDPE designated (Certified Distressed Property Expert) about what inspections you should pursue.
Find a real estate attorney. Short sales can present problems for both you and the home seller if you don’t cover your bases. Your exposure is much less as a buyer – but you’ll want to talk to someone to make sure you have your tracks.
Get an experienced short sale agent. If you need to, ask around. Not every real estate agent has done a short sale so you’ll want to make sure you get someone who is familiar with the process. You may want to look for someone who has done at least 10. Arizona’s short sale process does take some finesse to get through so experience matters.
Speaking of finesse yep you guessed it you need time. If you need to buy a home quick buying a short sale isn’t for you. You need to plan for at least 4 months at a minimum to get through the approval process with the seller’s lender. You’ll want to also find out if there is any issues with foreclosure proceedings too. Has the seller’s lender started foreclosure proceedings? If they have you’ll want to tread cautiously as the lender could sell the house in a trustee sale before you get through the approval process.
With all this said – make sure you have flexibility in your home buying and home living options. The Arizona short sale process isn’t for everyone, but if you have the time and a good plan B you can find yourself a heck of a deal.