The most common complaint with Short Sales is the time involved. If a buyer is needing a new home within 60 days a Short Sale should not be considered. If a buyer has time than a Short Sale can be a good option. The Short Sale purchase cannot be made contingent on you selling your home in order to purchase the short sale, the seller(s) will not accept contingent offers. Unpaid taxes are the responsibility of the seller(s), speak with your buyer's representative to negotiate the contract ensuring you will not be responsible for these fees. Buyer's of Short Sales located in an HOA typically have responsibility for HOA transfer and other fees associated with the HOA. Your buyer's agent can provide you with this information and working together with a good title and escrow officer can ensure these fees are prorated correctly between the seller and buyer.

Purchase Contracts for properties listed as a Short Sale will also include a Short Sale Addendum and an AS-IS Addendum as part of the purchase contract. The property is typically purchased AS-IS, meaning the buyer's is purchasing the property in it's AS-IS and Where-Is condition, and the seller(s) WILL NOT in most cases make repairs. The seller(s) is financially distressed and typically has not had the funds to maintain the property and appliances as they normally would. As a buyer, you will want to conduct your due diligence on the purchase, investigate the property and conduct a home inspection by a certified home inspector, the same as you would for any real estate purchase you are considering. Some Short Sales are vacant and do not have the utilities turned on and in some cases the seller(s) will not turn them on. The buyer could be responsible for turning on the utilities to conduct the home inspection and final walk-through of the property prior to close of escrow. Your buyer's agent can offer resources and information and advise you in these matters. Short Sales do not usually include a Home Warranty and the seller(s) will typically not pay for a Home Warranty, so you will want to consider this minimal cost and purchase a Home Warranty as part of your purchase.

As with any real estate purchase you will want to be fully advised and know the pros and cons of a purchase and associated expenses. A professional real estate consultant, acting in the capacity as a buyer's representative or "buyer's agent," has the fiduciary responsibility to counsel you in the known risks involved and assist in minimizing the known risks in the purchase of real estate, including a short sale purchase, for their buyers. You will want to work with an agent that is certified and experienced in Short Sale listings and purchase. Let your certified Short Sale professional real estate agent guide you. There are great deals, you can minimize your risks, and know ahead your associated costs . . . with patience (over 60 days or more) you can be the happy and satisified owner of your new home! :o)

I hope this information was helpful and wish you the best in your new home purchase. Please contact me if I may be of further assistance. Make it a great day!

Blessings, Sherrilee

Sherrilee Denton, REALTOR®, RECS, CNE, CSSS, SSPA
Delivering Dreams, One HOME At A Time
Our blessings come from helping others, how may I help you?

The most common is the waiting for the approval! Also if there is not a successful short sale negotiator in place it may not get accepted! You can continue to make offers on other homes that you like in case it does not get accepted.

I would highly reccomend that you know a short sale expert is in place before you consider putting in an offer.

Feel free to contact me anytime if you have any other questions!

Lucinda Tkach
Windermere
lucindat@windermere.com

Hi (again)!

There are many short sales on the market today and you can certainly find a good deal. The biggest concern clients express is the "waiting process" and "uncertainty" associated with the short sale. In order for a short sale contract to be officially "accepted", you have to get both the bank (and multiple banks if there are multiple loans) to agree to the sale price and the owner also has to agree. Depending on where the home is in the short sale process, this can happen quickly (weeks) to a very long time (months) - I have known some clients that have had to wait 6 months before they got an acceptance on their offer. So patience is key! In addition, you have a risk that after waiting for months, for some reason - either the bank(s) or owner(s) decide not to do it and you have to start all over.

There are some possible advantages on a short sale: if the owner lived in the home, they will provide a Property Disclosure Statement letting you know all kinds of information about the home. Banks do not provide this info (as they don't know anything about the property). In addition, the home owner may be taking care of the property and likely won't steal appliances or fixtures as you may find with some of the foreclosures.

You should make sure to work with a reputable title company during the escrow process - they will ensure that taxes, HOA fees will be prorated to the date you purchase the home ... ensuring that the bank / homeowner bring current any outstanding debts as part of the settlement process. On some short sales, you will find the owner is no longer living there and there isn't electricity - so you may have some increased costs to bring the home back into your desired maintenance level.

Best wishes!

JReeves,

There are many negative factors for the buyer when placing an offer on a short sale. Below are some highlights:

* They can take up to 6 months (or more in some cases) just to get a response from the bank - which can be an acceptance, counter-offer or rejection.

* If the property has more than one lien holder, you are at the mercy of the timing of both. Plus both will have to agree on how much go to the jr lien holders, which rarely occurs. Chances of this ones closing are even smaller.

* In most instances the seller keeps the property active (which can be done by several ways without violating any rules) and can have well over 20 offers on the same property.

* Many times the bank counter-offers with a higher price and/or the bids drive the price up. It is very common for short sales to sell well over asking price. That is why on a short sale the listing price should be viewed more like a start bidding point than the real price.

* Based on the latest figures only about 10% of short sales ever close. If you add to that the fact that each property can have multiple bids, you will see that each individual offer could have less than a 1% chance of getting the property after waiting many months for it.

- Foreclosures in most cases are a lot better option for the buyer. The listed price has been approved by the bank and they usually respond in 3 to 5 days (in some rare cases they might take up to 2 weeks, but that is not common). Biddings are also getting more common every day on foreclosures, although that is still not always the case.

There should not be any extra fees when buying a short sale, although it is very common on those cases to have unpaid taxes and HOA fees, which migh represent an issue.

Carlos J. Ramirez, PC, ABR, CNE
Associate Broker, HomeSmart -
http://www.SmartAZRealty.com