Financing in Philadelphia>Question Details

Miss  Henry, Home Buyer in Philadelphia, PA

is it a good idea to buy a short sale house what is the down fall on it?

Asked by Miss Henry, Philadelphia, PA Sat Jul 30, 2011

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12
Hi Miss Henry,

It is a good time to buy a house in general. Despite of the name short sale, it's not short at all. The whole process takes months and could be very stressful but if you are patient, go for it!

Please feel free to contact me if you would like more information.

Natasha James
Century 21 Advantage Gold
natasha.james@c21ag.com
267.499.0011
0 votes Thank Flag Link Sun Apr 8, 2012
The biggest pitfall could be ending up homeless. Most short sale never close. Realize the seller is asking all of the lenders that are lien holders against the property to settle for less than they owe. They won’t do that if the seller has other assets. Don’t limit yourself to just short sales, there are really good prices on homes that won’t require that much stress and waiting, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time.
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Sat Apr 7, 2012
The others have already mentioned that it takes long for seller's lender to approve the short sale.
If you are looking for a home to move into , it may be problem if you have to give your landlord notice or if you are selling your current home as you have to move out when you sell your home.
If you can address these issues you should consider buying a short sale.
There are many motivated sellers who sell at a bargain price so you should consider working with a good agent who can negotiate a good price on a home that is not a short sale..
0 votes Thank Flag Link Sat Apr 7, 2012
The bottom line is that short sales are NOT SHORT. So if you are not in a hurry (second home, no kids to get registered in schools, etc.), it might work for you. The service you will get from the agent you use may be compromised if the lender leans heavily on them to accept a low commission. I do not do short sales as I think the potential savings is not worth the risk and there are a lot of other homes out there where I can have better leverage to get a good deal for my clients.
0 votes Thank Flag Link Wed Aug 3, 2011
Short sell homes are a great opportunity for the buyer and result in a win-win-win. The buyer usually gets a home less than market value, the lender saves the cost of foreclosure which is usually forth coming, and the sellers gets out of their current obligation. Because they require the approval of the current lender, they can take longer to process and close, but most lender have streamlined the process and can move them through. So if you have a little flexibility in your moving schedule and the house meets your needs, I would partner with a good agent in your area and go for it.
0 votes Thank Flag Link Wed Aug 3, 2011
Hello Ms. Henry,

If you want to purchase a home that is currently listed as a short sale. The major obstacle of purchasing these listed homes is time. By this a mean, it may be a few months for a response from the 3rd party approval i.e. the lender(s). If you find a home that you like and want to purchase keep in mind that it may take i.e. many months for a response from the bank. The bank has gotten significantly better at responding but I have seen short sales loom in contract status for a year or longer (worse case) and they normally sold "as is" so repairs and updates will be the buyer's responsibilty.

If you looking at short sales make sure the agent you work with is familar with the dealings of a short ,and hopefully the listing agent is experienced as well. This will make the process much faster.

Best of luck
0 votes Thank Flag Link Wed Aug 3, 2011
Hello Miss Henry,

Yes, it is a good idea to purchase a short sale. It may take some time for the transaction to close but typically you can get a good deal by purchasing a home that is a short sale. The banks that are holding the mortgages on these properties are bombarded with short sales. You must have patience to deal with the process and have time to wait for the deal to close. Some properties will be in move in condition. Some will need repairs. Banks make no repairs on these properties. Repairs will be your responsiblity. Hope this answers your question. If you have any further questions you can contact me at ssgoff@aol.com.
0 votes Thank Flag Link Sun Jul 31, 2011
If you have the time to wait and the patience then a short sale can be a great buying opportunity for you. You will almost certainly get the house at a price that is below market. The big factor in determining upfront how long the short sale will take is on how much work the listing agent has already done with the bank that holds the mortgage on the property. If they have already started the process and have been assigned an asset manager by the bank then you may be looking at 2-3 months to get an answer. If not then you could be looking at 4-8 months depending on the bank.
If you make an offer on a short sale you need to make sure you are working with a lender that can close your loan very quickly because once you get an offer from the bank on your short sale they want to close in 3 weeks or less almost always. Make sure you ask your lender how long their underwriting turn times are so you know if you should be using this lender. For example we underwrite loans in 48 hours and can provide same day closing documents when loan is cleared to close.
You also need to know upfront before you make an offer if the property will pass an appraisal if not then you will need to do an FHA 203k Rehab Loan so that you can include the repairs in your mortgage.
If you are new to the home buying process then you might want to attend a free home buying seminar, the nexxt one is August 13th in Dover, Delaware and August 20th in Newark, DE. Go to http://www.DelawareHomeBuyerSeminar.com for more information.
John R. Thomas
Primary Residential Mortgage
Certfied Mortgage Planner
NMLS - 38783
302-703-0727 Office
httP://www.DelawareMortgageLoans.net
0 votes Thank Flag Link Sun Jul 31, 2011
Miss Henry,
As others have said, a short sale house can be a good buy if you can be patient.
You will be buying in 'as is' condition. If repairs are needed for your financing they will be your responsibility.
After time goes by while the short sale lender collects documents from buyer and seller, gets appraisals, negotiates terms, the final decision lies with some investor who may or may not approve the sale.

I recommend that you consider your needs and your financing options first and then decide whether a short sale is a good choice for you.

You can contact me directly for information relating you your particular situation.
Kathleen Sheridan
Weichert, Realtors - McCarthy Associates
ksheridanrealtor@gmail.com
0 votes Thank Flag Link Sat Jul 30, 2011
Miss Henry, it is a GREAT time to buy in general. Short sales will help you to get an even BETTER deal.

The only two downfalls I can think of are:

1. It could take a few months (I'm seeing anywhere from 3-10 months in this part of the country) to come to an agreement with the bank on price. During this time you can not put offers in on other homes unless you have the wherewithal to purchase multiple properties.

2. Most short sales are conveyed in an
Web Reference: http://www.FamousEric.com
0 votes Thank Flag Link Sat Jul 30, 2011
Miss Henry

You should have plenty of patience, as it can take time.

Also, there is no guarantee, That you will get the place, as depending on how long
The home has been Short or the seller has not paid Mortgage, the Bank may choose
To foreclose.

Also, if the home is priced way below the market, then there is no guarantee that the Bank
Will accept your offer.

Have a great weekend.
Perry
0 votes Thank Flag Link Sat Jul 30, 2011
I would consider a very good idea:

there are basically two downfalls;
It will take a very long time to do, possibly a year or more, and
It will stress you out teriffically.

If you have the patience of Job, call a Buyer's Agent and talk to him/her about it.
0 votes Thank Flag Link Sat Jul 30, 2011
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