Short sales seem to be all the rage….or maybe all the fury. In all honesty, the various companies are still trying to figure out a process that will work, but unfortunately, the unknowns can cause much pain for all of the parties.

Buyers are feeling perhaps the majority of the pain with extended response times and frankly, more often than not, it is unclear who the real decision maker is on an offer; is it the owner that’s in financial trouble, his/her attorney, the mortgage holder (often more than one) or someone else????

One might think that in this “slower” market, all parties would be able to focus on the key person that might be able to help the situation out, the prospective buyer. Instead, it can be difficult to find out who really holds the paper, who is the right person at this lender who can make a decision (often by committee) and does this bank, most likely not locally based, have any idea of what the current market value is of the home. One of the key documents banks are using in their decision of value is called a BPO (Broker’s Price Opinion). It’s kind of an “appraisal light” and is most likely completed by a local real estate brokerage. In the vast majority of the cases, this evaluation is simply a “drive-by” look and is mostly based on the numbers without anyone knowing the true condition of the inside of the house.

Certainly, if you are a buyer who is considering making an offer on a short sale property, try to find out in the beginning (1) if the person that can make the decision is identified (a good listing agent should know the players), (2) inquire if a BPO has been submitted to the bank, (3) ask if there have been any prior offers and (4) find out how the process worked in that case.

There are some great buying opportunities in this market, just be aware of the timing issues with short sales, it could easily be 30-60 days before you hear anything about your offer. Also, ensure that you see the inside of the home, document the current condition with photographs, and ask about mortgages/liens from all parties including their homeowners association. All of these elements are key to making the best case of why your offer is a reasonable one.

Although many people believe that time doesn’t matter because there is tons of inventory, often, when you really drill down to a buyers true wants and needs, there are only a couple of properties that are best and you don’t want them to miss out on other properties, while you’re caught up in the short sale do-loop.

Certainly there are some great opportunities in short sales. Just make sure your Realtor has their eyes and ears wide open for your best interests and to make the sale as pain free as possible.