With the prevalence of short sales and bank owned properties in the Portland real estate market these days, it behooves buyers to become a little more savvy about how to work within the system to close a deal faster and with fewer hassles for these types of sales. Following are some tips to get your bank owned or short sale deal closed faster. Short sales are admittedly harder, but if you follow these pieces of advice, you’re likely to fare better than if you don’t.

1. Make an all cash offer

This is hard for most people to do, because we’ve become accustomed to going into debt for everything. Nevertheless, average people with average incomes are increasingly paying off their mortgages in full through financial discipline and hard work. You don’t have to be wealthy to aspire to and actually become debt free in a short amount of time and pay cash for a house.

2. Sell your current home before making an offer on another one

This can be an inconvenient experience, because you’ll have to live with relatives or rent a home during the interim, but it is extremely helpful for a number of reasons. First, if you have enough equity, it may enable you to make an all cash offer. Second, you won’t have any contingencies to tie up the new deal. It just makes for a clean offer, so if you can pull it off, do it.

3. Get preapproved with a mortgage broker, not just prequalified

Many buyers don’t know the difference between getting pre-approved and pre-qualified for a home loan. All too happy to have a warm body to show a house to, many agents don’t care enough to advise their clients on this.

Being prequalified for a home loan is sort of like getting those mass mailed postcards telling you you’re “prequalified” for a credit card. It simply means that, on the surface, you’re credit history and unverified income appear to qualify you for the loan, but the bank hasn’t necessarily seen all of your backup docs, tax returns, etc. Pre-approval means the bank has all the documentation and is ready to actually give you the loan. They just need an acceptable property for collateral.

4. If possible, get your loan from the bank that is selling the property

This is not always possible if you’re going to get pre-qualified before you even start looking for a home. But if you know you want to make an offer on a particular property, especially if it’s a short sale, anecdotal evidence suggest that you may have better luck getting the bank who has to sign off on the sale to say “yes” if you are taking out your loan with them. They may be writing down a bad loan the first time around, but if they get the deal with your loan, they are more likely to agree to the deal.

5. Tighten inspection timelines to 3 business days instead of the standard 10

This is an easy place to cut an entire week out of the closing process. Most inspectors have no problem getting their visit scheduled within 24 hours, and they often print their inspection report on the premises.

6. Have mortgage broker order appraisal 2 business days after offer acceptance

Ordering an appraisal can take time, and many mortgage brokers don’t want to do it until the end of the process so they have less money at risk if the deal falls apart. It’s not hard to find a mortgage broker who is willing and able to speed things up for motivated (and qualified) buyers. If you demonstrate your seriousness to close the deal, they will reciprocate and order that appraisal quickly.

7. Have certified funds to escrow prior to signing closing documents

This is something that should happen for all escrows. There is no good reason a loan officer can’t get certified funds into the escrow account before the signing. Waiting to the last minute is just asking for delays.

8. Don’t make any last minute credit purchases

Don’t even think of making any major credit purchase, especially by opening new lines of credit, once you’ve been preapproved. That will just raise questions and potentially impact your loan approval, causing serious delays. If your approval is already tight on the debt to income ratio, it could completely derail your loan.

The bottom line is that fast closings can and do happen, but you have to plan for it. Knowing a few tricks of the trade to can help your Portland real estate deal be one of the fast ones.

Listening to Non-Professional Advice

So you’re shopping homes for sale in the Portland Oregon area.  Good for you.  It’s a fantastic buyer’s market at the moment and mortgage rates are awesome!  Now all that’s needed is some expert advice from a relative or co-worker.  Make sure that the last house this person bought was in Detroit and about 20 years ago.  I’m  being sarcastic.

Hey, most people mean well but unless advice comes from someone who’s emmersed in the current local market it might be good to take it all with a grain of salt.  Keep in mind that real estate markets are not national and are dynamic.  What was common practice 6 months ago may not even apply today.

The purpose of a Realtor is to negotiate the best deal possible, protect your interests and watch out for pitfalls that’ll potentially cost you money.  Get advice from people and run it by your trusted real estate broker to see how applicable such can be at this point in time.  I can’t tell you how many buyers have missed out on properties because they insisted on listening to non-professional advice.  A good Realtor will keep you on track!

Not Shopping the Mortgage Market

Shopping the mortgage market can be a frustrating experience.  Mortgage brokers are required by law to give quotes in writing along with a Truth in Lending statement.  What’s known as a Good Faith Estimate (gfe) shows closing cost numbers.  Without getting into too much detail essentially this allows home buyers to compare mortgage brokers in the same format.  Like any other industry there are honest, ethical lenders and those who you may not want to do business with.

A good real estate broker should be familiar with how to read a gfe.  He’ll can potentially identify numbers that are blatently high by comparison to the norm or those which could even be missing from the equation.  By no means should your real estate broker be considered the mortgage professional.  Double check numbers by running line item costs past several lenders.  If the numbers are accurate they should fall within a small margin of eachother on all gfe’s.

Does the real estate broker have to know your personal information?  Heck no.  Looking at a good faith estimate does not disclose buyer’s income, cash reserves, or any confidential information.  It gives a general overall picture of home purchase costs that will be related to a purchase price.  The buyer’s agent gets all this as part of the transaction’s closing documents regardless.  It’s called a closing statement and all parties involved see such.  Sharing a gfe during infancy stages of home buying with your Realtor could really help save money!

Not Interviewing Real Estate Brokers

Unless you make a point to sit down with several agents it’s tough to find a good agent.  Some are actually rated by outside companies based upon client feedback.  After puchase of a home is completed buyers will receive surveys from monitoring companies asking for ratings of agent performance.  These companies are not related to the broker in any way, keeping feedback objective.  Third party companies like QSC (Quality Service Certified) allow clients to submit feedback that actually ranks agent performance on a scale.  Agent ratings are available to anyone who wants to review such before getting involved.  Very few Realtors are monitored!

Ask for a list of referrals from buyers/sellers who’ve done more than one transaction with subject agent.  No agent with good community standings is going to object to contact of past clients.  Might want to think twice if there are no referrals immediately given.

For more tips on buying Portland real estate visit our website.  www.MaxwellSinclair.com