Buying A Short Sale

August 8, 2011

Short Sale Guides

If you are interested in buying a short sale then be prepared for a potentially very long wait with lots of little issues to contend with. The term short sale is a bit of a misnomer because in reality nothing is short about a short sale. So what are some things to keep in mind when deciding to buy a short sale?

    • The asking price of the home is normally set by the seller/agent. This can create a problem for you later on down the road because the LENDER always has the final say in the asking price of the home. The agent/seller may set the price low to attract interest but then once it’s sent on to the lender for final approval they may balk and increase the price.

 

    • If you submit an offer on a short sale that the lender feels is too low they may not respond or respond very slowly. Since the lender is not always aware of how much the seller is asking they may feel your offer is simply too low. This can create problems for you, the buyer, if the seller is not operating in good faith.

 

    • Don’t set your heart on getting the property. As we mentioned nothing is short about a short sale so its best to remember that you may change your mind on this property once you are 3 months into the process and it feels like its not moving fast enough. Stay optimistic but continue looking at other properties.

 

    • If you decide to pursue a short sale ask how many loans the seller has taken out on the property. It’s obviously easier to work with one lender instead of multiple lenders. Remember the LENDER always has final say when approving a short sale. The fewer lenders the better.

 

    • If you see a short sale listed as anapproved short sale this means the seller has been given the green light by their lender and will have an approved selling price. This can speed things up significantly.

 

    • When purchasing a short sale its important to understand that the home may be lacking in repair. The responsibility is placed upon the buyer to handle all repairs and a credit may or may not be issued to cover the repairs. This is just simply the cost of purchasing a home below its market value.

 

  • If the lender gives approval on the short sale you MUST close on time, there is no leniency. Normally in a more traditional home sale some leniency is provided for last minute adjustments/issues. This is not the case when it comes to short sales. This is why it’s so important to be working with a reputable short sale real estate expert so that no last minute hang ups ruin your transaction. Lenders have little patience when it comes to short sales so be extra prepared.

While buying a short sale can be great it is also more difficult. If you prepare yourself for a long ordeal and hire the right broker to help you along you should be fine. Just be prepared to walk away if you feel its taking too long.

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