Buying a short sale is it really worth it. Well that depends, If you’ve mentally prepared yourself to sit tight and wait for a response and it truly is a deal then yes go for it; but if your a buyer looking to move into your beautiful home by the end of 45 days then a short sale may not be the route to take.
The best advice I could give any potential homeowner is weigh out your options, do your research and try to get as much information up front so you know what you may potentially be walking into.
If you where to go by the name alone “Short Sale” you would think buying a short sale would be a quick and painless process, unfortunately there is nothing short about the process if anything it can be a very long process just to hear a “Yes, well accept the short” “No Thanks.”
In a short sale you need to sell your home as quick as humanly possible unfortunately over the last couple of months you’ve been falling behind on your payments and you don;t want to have to file a foreclosure or go the bankruptcy route. You decide to sell. You get an offer “Great!” but it is a lot lower than what you owe the bank. Simply put you “end up short” hence the name short now if your lender agrees to accept less than what is owed on the property you’ve got yourself a short sale.
For a seller this option is preferable because the impact a short sale will have on their credit report will not be as severe as a bankruptcy or foreclosure and the buyer gets a home at fair market value. If done correctly everyone involved in a short sale can walk away happy.
Think of all banks like a bad halloween carnival run by ghouls and goblins. Making an offer on a short sale could potentially just sit on some manager’s desk for all eternity at which point it is safer to assume your offer has been rejected and your chances of getting struck by lightning are greater than ever hearing back from the bank. Unfortunately you never know I’ve had short sales that have been smooth and others that have more hoops to jump through than a circus it all depends.
So unlike a regular sale don’t make the mistake of mentally moving into the home just because you put in an offer, nothing is final until you have an executed contract and an approval from the bank stating the terms and conditions the lender is willing to accept.
Are we there yet…..
I’ve not only been through of my share of short sale transactions to be able to tell you they are everything but SHORT. In a perfect world a short sale can take anywhere from 90 days to 120 days again in a perfect world. If you really have your heart out on a short sale clear several months off your calendar a year and a half just for good measure.
It’s easy to think that the lender or banks do this on purpose just to irritate buyers looking to buy a home in a great neighborhood at a great price; but remember real money is on the line here. The bank is essentially agreeing to accept less than what they let the seller borrower. It’s important to understand that they must do their due diligence if more than one bank has a lien on the home all banks need to come to an agreement. The lender is not only agreeing to accept less than what is owed but they will essentially have to cover any closing costs that the seller would have been responsible for.
If this is your first time buying a home I would probably tell you to skip the whole short sale process unless it’s such a good deal you wouldn’t be able to live with yourself if you didn’t at least attempt putting in an offer. The waiting game can leave buyers discouraged and down right frustrated with the buying process if the first home you put an offer on takes 4 weeks to hear back from.
You’ve been Approved!
Just like any sale the bank does have the right to accept your offer with conditions and demands of their own. Often times the lender will counter with an offer of their own that sometimes include the following:
- Buyer will be responsible for all repairs
- Wire transfers
- Notary Fees
- Association dues
I just recently had a customer purchase a short sale and once the offer was accepted by the lender we came to find out their was outstanding association dues totalling $7,000.00. Fortunately for my buyers the bank agreed to pay $6,000.00 of the total leaving $1,000.00. that would be the buyers responsibility to pay. In this instance the bank was willing to work with the buyer but not all cases turn out so great we could’ve easily been told that it would be the buyers responsibility to pay the full amount due to the association.
If the terms that the lender counter with are more than what you were anticipating and the figures are not adding up it’s ok you can choose to walk away with no hard feelings When in doubt contact your realtors to help you crunch numbers.
Call today to speak to one of our agents at SearchBroward.com (954) 580-6715