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Tips to Buying a Short Sale Home

6 Tips for Buying a Home in a Short Sale

By: G. M. Filisko

Published: March 19, 2010

By preparing for a real estate short sale, you can emerge with a great home at a favorable price.

When sellers need to sell their home for less than they owe on their mortgage, they’re shooting for a short sale. Short sale homes can sometimes be bargains, but only if you do your homework, stay patient, and remain unemotional during the sometimes lengthy and difficult short sale process.

Here are six tips for protecting yourself emotionally and financially when bidding on a short sale.

1. Get help from a short sale expert

A real estate agent experienced in short sales can identify which homes are being offered as short sales, help you determine a purchase price, and advise you on what to include in your offer to make the lender view it favorably. Ask agents how many buyers they've represented in short sales and, of those, how many successfully closed the transaction.

2. Build a team

Ask agents to recommend real estate attorneys knowledgeable in short sales and title experts. A title officer can do a title search to identify all the liens attached to a property you’re interested in. Because each lienholder must consent to a short sale, a property with multiple liens, like first and second mortgages, mechanic’s and condominium liens, or homeowners association liens, will be harder to purchase.A title search may cost $250 to $300 up front, but it can help weed out less desirable properties requiring multiple approvals.

3. Know the home’s fair market value

By agreeing to a short sale, lenders are consenting to lose money on the loan they made to the sellers to purchase the home. Their goal is to keep those losses as low as possible. If your offer is dramatically less than the home’s fair market value, it may be rejected. Your agent can help you identify the price that’s good for you. The lender will determine whether approval is in its best interest.

4. Expect delays

There are two stages to a short sale. First, the sellers must consent to your purchase offer. Then they must submit it to their lender, along with documentation to convince the lender to agree to the sale.The lender approval process can take weeks or months, even longer if the lender counteroffers. Expect bigger delays if several lienholders are involved; each can make a counteroffer or reject your offer.

5. Firm up your financing

Lenders will weigh your ability to close the transaction. If you're preapproved for a mortgage, have a large downpayment, and can close at any time, they’ll consider your offer stronger than that of a buyer whose financing is less secure.

6. Avoid contingencies

If you must sell your current home before you can close on the short-sale property, or you need to close by a firm deadline, your offer may present too many moving parts for a lender to approve it.Also, consider ordering an inspection so you’re fully informed about the home. Keep in mind that lenders are unlikely to approve an offer seeking repairs or credits for such work. You’ll probably have to purchase the home “as is,” which means in its present condition.This article includes general information about tax laws and consequences, but isn't intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

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Real-life discussions of short sales G.M. Filisko is an attorney and award-winning writer who luckily has avoided the need for a short sale on her properties. A frequent contributor to many national publications including, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

Visit for more articles like this. Reprinted from with permission of the NATIONAL ASSOCIATION OF REALTORS®.


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Internet Scams and Fraud

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Examples of Rental and Real Estate Scams

Individuals need to be cautious when posting rental properties and real estate on-line. The Internet Crimes Complaint Center (IC3) continues to receive numerous complaints from individuals who have fallen victim to scams involving rentals of apartments and houses, as well as postings of real estate on-line.

Rental scams occur when the victim has rental property advertised and is contacted by an interested party. Once the rental price is agreed-upon, the scammer forwards a check for the deposit on the rental property to the victim. The check is to cover housing expenses and is, either written in excess of the amount required, with the scammer asking for the remainder to be remitted back, or the check is written for the correct amount, but the scammer backs out of the rental agreement and asks for a refund. Since the banks do not usually place a hold on the funds, the victim has immediate access to them and believes the check has cleared. In the end, the check is found to be counterfeit and the victim is held responsible by the bank for all losses.

Another type of scam involves real estate that is posted via classified advertisement websites. The scammer duplicates postings from legitimate real estate websites and reposts these ads, after altering them. Often, the scammers use the broker's real name to create a fake email, which gives the fraud more legitimacy. When the victim sends an email through the classified advertisement website inquiring about the home, they receive a response from someone claiming to be the owner. The "owner" claims he and his wife are currently on missionary work in a foreign country. Therefore, he needs someone to rent their home while they are away. If the victim is interested in renting the home, they are asked to send money to the owner in the foreign country.

If you have been a victim of Internet crime, please file a complaint at


Professional Conduct Introduction

Professional Conduct Introduction

The REALTOR® Code of Ethics  pdf 2018 Code of Ethics and Standards of Practice (486 KB) represent a promise of professionalism by all who become REALTORS® which include; Duties to Clients and the Public and to other REALTORS®. As a result the term REALTOR® has come to connote competency, fairness and high integrity. Enforcement of the Code supports the REALTORS®' commitment to protecting the public and preserving a competitive marketplace.

The Burlington Camden County Association of REALTORS® provides its consumers and members multiple opportunities to resolve issues of potentially unethical conduct. These claims may be resolved through a full due process hearing or by use of the ombudsman, mediation or other programs.

Resolving a Complaint

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If you have a complaint against the real estate licensee you are working with, you should first make an attempt to talk to the broker to see if the issue can be resolved. If those efforts are unsuccessful, two avenues exist for making a formal filing regarding a licensee's behavior.

The first is to file a complaint with the New Jersey Real Estate Commission. The Commission is the government agency that issues and maintains licenses and writes the Rules and Regulations to which all New Jersey licensees must subscribe. The Commission will investigate the complaint and, if violations against the license law are found, can impose sanctions ranging from fines to license revocation.

The second is only available if the real estate licensee is a member of the REALTOR® organization. BCCAR's REALTOR® members subscribe to a strict Code of Ethics, and we are charged with ensuring its enforcement. It is because of a REALTORS® obligation to abide by the Code of Ethics that you can file a complaint at BCCAR. View the
pdf 2018 Code of Ethics and Standards of Practice (1.55 MB)

BCCAR DOES NOT determine whether the license law or regulations have been broken. Sanctions from the association tend to be educational in nature, but can include fines and suspension from the association.


Before Filing a Complaint

Who's involved?

Before processing a complaint with an Association of REALTORS®, you must first determine if the real estate agent involved is a REALTOR®. Not all real estate agents are REALTORS®. Only those who belong to an Association of REALTORS® can use the term REALTOR®.

When joining an Association, all members agree to abide by the Code of Ethics as a continuing condition of membership. It is because of a REALTOR®'s obligation to abide by the Code of Ethics that you can file a complaint at an Association of REALTORS®.

Determining what type of complaint to file

Before processing a complaint with your Association, you must determine whether your complaint concerns an ethics matter or an arbitration of a dispute.

    Ethics complaint: Charges that a REALTOR® violated an Article(s) of the Code of Ethics. Arbitration provides a means for resolving a dispute about a real estate transaction that the parties have been unable to solve themselves.

    Arbitration complaint or request: Often involves one member in disagreement with another member, usually over a commission dispute. Sometimes, an arbitration concerns a dispute between a member of the public and an Association member.

If your situation concerns both ethics and arbitration, the Association will handle the arbitration portion separately. The Association will consider the ethics complaint only after it has completed the arbitration. The Association always holds arbitration first.

Who may file an ethics complaint?

Anyone, Association Member or not, may file an ethics complaint against an Association Member alleging a Code of Ethics violation. However, the complaint must be in writing, be signed by the complainant, state the facts surrounding the case and be filed within 180 days after the facts became known.

The Complainant may file a complaint from any location. However, the Complainant must file it with the Association having jurisdiction over the individual named in the complaint.

Who may file an arbitration request?

REALTORS® who are principal brokers and clients/customers of REALTORS® may file an arbitration request. If the principal broker joins in the request, REALTORS® who are not principals may also file these requests.

Similar to the ethics complaint, an arbitration request must be in writing, be signed by the Complainant, indicate the amount in dispute and be filed within 180 days after the facts became known.

The Association provides arbitration facilities as a service to its members. Arbitration is not a disciplinary proceeding nor does it award damages. By becoming and remaining a member of the Association of REALTORS®, each REALTOR® binds himself/herself to arbitrate certain disputes.

Not every situation may be arbitrated at the Association. Conditions and limitations exist which you must consider. The Association will explain these conditions and limitations to you as the process continues.

NOTE: Disputes involving clients or customers require that they sign an agreement to arbitrate and to be bound by the arbitration. The Association's Grievance Committee will determine whether the complainant is a client or a customer and if the dispute is one that the Association can process.

Power of the Association

An Association of REALTORS® possesses limited authority regarding its members. Note the following limitations:

  1. The Association cannot try a member for the violations of the New Jersey real estate license law or any other alleged violations of the law. Its jurisdiction only covers violations of membership duties. The New Jersey Real Estate Commission solely controls the real estate agent's license to sell real estate. If you think a person has violated the law, you should contact another agency.

  2. For the same reason, the Association cannot suspend or terminate the license of one of its members.

  3. The Association can administer discipline to the REALTOR®. This would happen only in the case of an ethics violation being determined in a due process hearing procedure. The Association can use one or more of the following ways to discipline a member:

    • Send letter of warning or reprimand to the member

    • Direct member to attend an ethics class or training approriate to the violation

    • Fine the member up to $2,500 (this fine is not awarded to the complainant)

    • Place the member on probation

    • Suspend membership of the REALTOR®

    • Expel the member from membership
  4. An ethics proceeding may not include money damages.

  5. Associations can arbitrate some money disputes and must in certain situations. But, the member of the public must agree in writing to arbitrate the dispute and to be bound by the decision.

  6. An arbitration award may not be more than the amount in dispute. In no instance will the Association award 'punitive' damages.

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