Short Sales Require Patience

If you are searching for a great bargain it is possible to find one in a short sale.  There is just one important qualification for buyers going this direction:  You will need plenty of patience.

A short sale is one in which a homeowner’s lender agrees to accept less than what is owed on the mortgage on the home.  Homeowners use this as a way to avoid foreclosure and keep a foreclosure off of their credit.  Lenders avoid the high costs of foreclosing on a property and then putting it on the market to sell.

A short sale can be attractive since a lender may accept bids on the home that can be 10% or more below market value. 

Short sales should really be called “long sales” since in many cases it can take months for a buyer to hear back from a lender. 

One of my clients bought a short sale house for $270,000 that would have sold for $425,000 three years ago.  Another client is in the waiting period to see if their bid under $400,000 will be accepted on a home that would have sold for close to $600,000 three years ago.

So, is the wait worth it? 

                  Consider these points before committing to bid on a short sale:

1.      You’ll wait without any communication.  Your Realtor will keep calling but most likely the news will be “I don’t have anything to tell you, again”.  You have to plan to wait months with no news.   You may want to give the bank an ultimatum but it won’t work to say we need to hear or we’ll walk.  It doesn’t make any difference.

2.      You’ll get a deal, but within reason.  Don’t expect the bank to give you a steal so make a fair offer.  Your Realtor can give you comps to help you with making a fair offer.  Make the terms of the contract as inviting as possible and if you have cash you just may move to the top of the list.  If you want a real steal, look at homes that have been foreclosed on as they may be even less expensive.  Of course they may be in really bad shape so expect to fix them up. 

3.      Sales are “as-is.  Don’t expect the bank to offer to do repairs.  Get a home inspection and a pest inspection and any other inspections so you know what you are getting.  Just factor in the repairs to your costs.

4.      Plan for “Plan B”.  Keep looking even if you have a bid in on a short sale.  If the bank does not take your bid, you’ll want to have another house in mind.  You just might find something you like better that isn’t a short sale as there are sellers who are motivated enough to take your offer.

5.      Don’t lose sight of the goal.  You are buying a home to live in so base your decision on whether you’ll be happy to live there for awhile.  You want your home to be your castle!

                                                                               
                          Call Linda Olson for help 

                                    
       in buying a short sale!  209-743-8414