Hello Karaleah,
there are many variables in a short sale and many pitfalls that can be avoided if handled correctly. Your best source of information on this should be your agent. She/He should have some knowledge of short sales so that they can guide you through the process.

First thing you need your agent to ask the sellers agent is if the sellers will likely qualify for a short sale. Is there a hardship such as job loss, lowered income, or a mortgage payment adjust that make it so that the homeowner CANNOT afford their mortgage. Also, does the listing agent have experience in negotiating short sales? If not, then the agent will need help in getting this deal closed.

2nd. thing you will want to find out from your agent is if yours is the only offer the listing agent and seller are considering. I always open escrow when I am working on a short sale even if the bank has not approved the sale yet. This will ensure that the seller is not accepting other offers and that your offer is the one the lender is considering. As a buyers agent I have had too many buyers disappointed when they find out months later that the seller was actually considering another offer all along. Many buyers do not like to commit a deposit to escrow but this is the only way to ensure that there is actually a contract between you and the seller and you are just waiting for the banks approval to seal the deal. As a listing agent I have had the problem of working weeks on a short sale only to find out that the buyer was making several offers on other houses and no longer wanted ours. Opening escrow will ensure that everyone is on the same page and this is your home once the lender approves the sale. Make sure your agent writes in a provision that during short sale negotiation your deposit is refundable with written cancelation.

3rd. You want to find out from your agent what lender/lender's are involved in the short sale. A lender such as Wachovia tends to approve short sales quickly (usually in less than 1 month) where as other lenders such as Bank Of America or Indymac usually take a minimum of 60 days and up to 120 days or more. If there is also a 2nd lender than that can complicate things more. Your agent should ask what lender/s are involved and find out what sort of experience the other agent has with these lenders. The listing agent should also have an idea of what point in the negotiation the file is. Make sure your agent gets regular updates on this.

4th, you want to make sure that your agent is in constant contact with the other agent. There should be weekly updates between agents and clients. Everyone needs to be kept in communication. This is key.

5th. And maybe this should have been the first point, do you like the house? Is it worth waiting for in your opinion? If not then move on but be sure that your agent communicates this to the listing agent so that they are not left negotiating a short sale for a buyer who is no longer involved. I hope this helps... Good luck!!

The real questions are:
who is the lender that has to approve the short sale?
is there more than one loan that needs to be approve the short sale?
Is the mortgagor qualified to complete a short sale?
Will the lender require a defeciency if they approve the short sale and is that acceptable to mortgagor?
Is there any potiental issues with condition that may require funds from the bank or owner?

Then you can make the decesion what makes sense for a timely closing and if you want to roll the dice if you get the tax credit or not! This something your buyers agent should assist you with reviewing so you make the best choice.


Keith Manson
First Weber Group
Certified Distressed Property Expert
Greenfield,Wisconsin

Karaleah,

A short sale will typically take anywhere from 4-8 weeks to get lender approval and then another 30 days from that date for you to get your mtg. You have to close prior to 12/1/09 so you need to whatch your timline closely. It is going to largely depend on what bank is holding this mortgage and how good the listing agent is at negotiating with the bank for the short sale. If you haven't gotten an absolute approval from them by the mid of Aug you may want to keep it going on the back burner and start looking around for some other alternatives. You'll want to make sure you are under contract on a property by the beginning to middle of Oct with a closing date prior to 12/1. Let me know if I can assist you in any way.

Tim Ireland
RE/MAX All Properties
815-215-4018
tim@timireland.com http://www.TimIreland.com

A short sale can take 3 or more months to close. Even when you have a signed contract with the seller you are still dealing with a third party (the bank) that needs to approve the transaction. It's very hard to find out where you are at in the process because the banks do not have enough people to process them. It's rare that a short sale can close sooner than later.

Ask your buyers agent unconfirmed where you are in closing process. If you have had inspections, appraisal, approved by lender undetermine what the hold would be

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