“I hear a lot about short sales. Do you recommend buying them or avoiding them entirely?”
Answer:
Great question. And like many questions, the answer is “it depends.”
In this case it depends on the short sale particulars:
– How many loans is the seller going short on?
– Does the listing agent seem to know what he/she is doing?
– How far along is the short sale…just hitting the market, in process, or perhaps even approved by the bank?
– If it’s been approved with another buyer who cancelled, will the bank let you “step in” and close quickly?
– Who is the bank? (One bank is REALLY easy to work with)
– Is it under the HAFA program (a very easy program)?
And it depends on you:
– How badly do you want that home?
– Are you willing to wait weeks or perhaps months for an answer?
– Are you willing to take the home 100% “As Is”?
– Are you willing to pay more if the bank insists on a higher price?
– How well does YOUR agent understand short sales?
I personally bought two short sales last year.
The first had been approved by the bank and the buyer backed out at the last minute. They were able to substitute me in and we closed in about two weeks.
The other wasn’t handled quite as well by the listing agent. Tax liens popped up that should have been caught earlier. Then they were not handled correctly, causing an extra two month delay. It closed in seven months on the LAST day the short sale lender would extend to. So we came within one day of the property being foreclosed and me losing the property after seven months of waiting.
Bottom line: buying a short sale is a risk. We advise our clients to look at short sales LAST.
