Purchasing a home that is being offered in short sale can be a great way to buy a home at a considerable discount to market value, and they are everywhere. It seems that as the number of foreclosures on the market has decreased in recent months, the number of short sales has increased dramatically. The path to home ownership today is filled with all sorts of things that can make you want to pull your hair out. Appraisal issues, repair issues, and all sorts of new reasons that you won't be able to qualify for a loan are just some of the things that might drive a buyer crazy. Short sales not only are unlike almost any other method of sale, but they also require a different type of home buyer as well. The following are just some of the things that you need to know about regarding this type of sale.
The first thing you need to make sure you have, before you try and navigate through this market, is A KNOWLEDGABLE BUYER'S AGENT. This does not mean call up the agent on the sign in front of the house and let them handle the whole transaction. It also doesn't mean call up your grandmother who happens to still have her real estate license. (nothing against grandmothers, and if she has knowledge of short sales, and is a competent buyer's agent than by all means call her up to represent you) What you need here is someone who understands, both the timeline involved in a short sale and also the steps that you, the home buyer, need to take in order to make sure that the transaction goes smoothly.
The second thing you need to have is (and this is actually the most important thing)...... patience. There will be long waits involved in every step, along the way in the short sale process. The main thing to remember is that if you have to be into a home in a certain time period than a short sale is not, I repeat NOT!!!!! going to be a good choice for you. The Short sale process for buying a home, can take anywhere from 30 days to 4 months, JUST TO GET AN ANSWER FROM THE BANK! If you need to be in a home in a certain school district by a certain day, than a short sale is not for you. If you are being offered a relocation package from your business and you have a deadline that you need to close on your home by, than a short sale is not for you. If you have a home to sell and you need to coordinate the closing of your home, along with the closing of the short sale, than a short sale is not for you. In all actuality, the only home buyers able to take advantage of these opportunities are really those who a) don’t have a home to sell, or don’t have to sell a home in order to buy another one anyway, b) have no timeline by which they need to be in a home, and c) have the ability to close on the short sale with only a minimal amount of notice of the acceptance of the short sale by the lender.
I have made plenty of offers on properties being sold through short sale, and almost every time I end up not being able to complete the sale. The singular reason for the short sale not being completed in most of these cases is that the buyer(s) that I am working with do not have the patience that is required to wait for an answer. I have the SFR designation for Realtors, which is the short sale and foreclosure resource designation. I sat through many classes before attempting to help the first buyer through this process. I completely and totally lay it out on the table for the buyer before we write a contract, to make sure that they understand exactly what to expect. In some cases it happens much faster than I tell them to expect, which works out well for everybody, but when it takes the full amount of time that we are required to wait, about 30-45 days into the process, the buyer gets antsy and doesn't understand why it is taking so long. In those situations we end up missing out on some other great deals and then miss out on the short sale as well, because we cancel our offer so that we can move on toward another house before the bank (or whoever actually holds the loan) gives the approval we are waiting on.
To be continued....