What To Know About Buying a Short Sale Home

Have you heard nightmare stories about short-sales and ever wondered what the fuss is all about? The major issues involved with buying/selling a short-sale are: everything has to be approved by the bank, the bank takes a long time to do anything, many banks have poor processes/systems, and there is no guarantee the bank will approve the deal.

The following tips will help prepare people for short sales home buying and what to know about buying a short sale home.

All sales need bank approval: First, you have beat out any other offers on the table and get the seller to sign and accept your offer. But that is just the first step. The price, escrow length, closing costs and all other terms of the offer must be approved by the bank. There are many ways to structure an offer to make it appealing to a bank ” your Realtor should advise you on this.
Short-sales take a long time: Short-sales take anywhere from 2-6 months to get an approval and then you have to make it through escrow. Very few home shoppers actually have the luxury of waiting 6 months to find out if their offer will be accepted. Many buyers enter into a short-sale hopeful that their deal will be different and one of the quick ones. After a few months go by and they see something else they like just as much, they will not hesitate to make an offer on another property and move on.
Banks are ill-prepared: Very few banks prepared for the onslaught of short-sales that have been sent their way. If they saw it coming, they probably wouldn’t have written bad loans They are testing out new systems, hiring & training new personnel and sorely understaffed in many cases. When you submit a perfect short-sale package with an offer, you still have a line to wait in for months in some cases before they work on your file.
The sale may not get approved: Even after waiting for months, resubmitting paperwork already sent in, negotiating, etc., the deal may not get approved. With this uncertainty, it is no surprise that some buyers move on to other properties that are a sure thing. Can you imagine waiting 5 months for your deal to get approved, only to have the home get foreclosed on and go back to the bank?

All in all, it is obvious why the short-sale homes are something to be weary of. With a lot of inexperienced people on all sides of the transaction, it takes a long time to get an answer and sometimes even that doesn’t happen. The system is broken, but without the money and manpower to fix it, I’m quite sure well be struggling through these for at least another year before the banks get their act together.

About the Author:

To view all San Diego homes for sale, log on to Adam’s website. You can also get up to date stats and market data, as well as local and school information.