Before we include short sales in your search, it is important for you to realize the key differences between a short sale and a regular resale purchase.
What is a “Short Sale”?
A short sale is when there is more debt owed on the property than the property’s value. In a loan default situation (pre-foreclosure), the creditor(s) may be willing to agree to allow the property to be sold for less than the loan amount and/or accept less than (or “Short”) the amount owed releasing the lien and reporting the debt as paid.
How Long Will I Have to Wait to Close on a Short Sale Home?
The answer to that depends on many factors (lender time lines, number of lenders involved, etc.) so each case is different. We usually tend to tell our clients to expect at least 90 days from when our offer is submitted to the bank to actually close on the home. Therefore, if you need to get into your home in a time specific period, please let us know. We won’t necessarily avoid showing you any short sales, but we will pre-qualify the listing agent of a short sale before showing you a property to see how their time-frames fit into your needs.
Can I Put Offers on Multiple Short Sale Properties?
We do not recommend it. You need to show the seller and the bank that you are a serious and committed buyer of the property. Remember these sellers are facing foreclosure on their home and are under time limits. If you are not 100% committed to buying the home, we should step aside for someone who is committed.
What are the Benefits to Buying a Short Sale Home?
Usually a short sale is attractive to buyers because the sellers are motivated and the property can often be bought for less than market value. Often times a seller still lives in the property which means that a property disclosure would be available, and the property condition might be better than many bank owned properties.
Are there any Disadvantages?
Most buyers will exclude short sales from their search due to the length of time it takes to hear back from a bank to your offer. Although banks are getting better at their response rate, it is still not unusual to wait two to three months to hear whether there is an acceptance. There is also no guarantee that the bank will accept the offer so you could wait months and still not get the property. Another disadvantage is that most often the home will be sold AS-IS with no repairs included.
In conclusion, you might be a good candidate to buy a short sale if:
You don't have a home to sell, you don't need a home immediately, you can afford to make any repairs needed, and you don't require large closing cost contributions.
Any other questions? Call Gina and Company!
