Short sales should be called long drawn out sales that may not close.
Short sales when 2 banks are involved rarely if ever close.
Short Sales with 1 bank involved seems to have a better track record but thats not saying much
the longer the server holds onto the short sale the more money they make.
Some banks are willing to cooporate but very few.
Our advice There are far better deals on the market without going the short sale route especially if your not informed enough to deal with them.
Remember also on short sales 95% of the time it's an AS IS Sale .. let the buyer beware!
All the best
Dave & Lisa
Working with short sales is a combination of resolve on behalf of the buyer and knowledge and experience on behalf of the listing agent/negotiator. The reason you hear so many horror stories is that people aren't prepared for what they are getting into.
The listing agent needs to have some experience (keep in mind that everybody claims to be a short sale or distressed property expert) working with this type of sale. Most agents aren't qualified to do the work because short sales are an ever evolving transaction. An agent who lists 3-4 short sales a year simply doesn't have the experience to understand how the process is changing and the relationships at the banks to get the deals done. The same house sold short by two different banks (theoretically) will take place very differently, and in fact the same house sold short at two different times by the same bank (theoretically) would be vastly different.
As a buyer, I would encourage you on a couple of fronts. First, if you are going to do this, you need to get educated on your market. One of the biggest short comings of inexperienced short sale listing agents is that they put a house on the market and then reduce the price until they get an offer. The problem with this philosophy is that it sets up the transaction for failure. In a short sale the bank will only sell the property for market value, a value they get wrong from time to time. If the listing price is less than market value, the buyer thinks they are getting a steal. Three months later the bank finally gets around to countering back at market value and everyone just wasted a lot of time because the buyer isnâ€™t interested at that price. Knowing your market means you will be able to avoid those â€œtoo good to be trueâ€ deals or at the very least understand them for what they are â€“ a very long shot.
Second, as a negotiator of short sales for other listing agents, I currently have 15 short sales at some stage of the process right now. Working with that many transactions I can tell you that my number one failure point in short sale is inexperienced buyerâ€™s agents and their impatient clients. Short sales can take as little as 2-3 months and as long as over a year to complete. More short sales fall apart because of impatient buyers than for any other reason. Buying a house is emotional and exciting. After a couple of months of waiting, buying that house is boring and most buyers begin to look around at what else is out there. They then become emotional about another house and cancel the short sale purchase agreement â€“ usually a few weeks before acceptance as it were.
-Find out how experienced the listing agent or their negotiator is 10-15 a year minimum.
-Know your market so that you can sift out the good deals from the unrealistic listings.
-Commit to the transaction and donâ€™t walk away â€“ an experienced negotiator will almost always get a deal closed given enough time.
Coldwell Banker Burnet
In today's short sales it is how prepared the bank is and how prepared the listing agent is. We are starting to see more and more short sales close is less than 2 months in some cases we have seen approvals in 2 days. While these shorter time frames are offset by the longer ones, having knowledgeable agents on both the listing and buying side will help you if you are buying a short sale. Short Sales still offer you some savings in the marketplace today.
Knowing what your time frames (such as when do you have to move versus when do you want to move) are is crucial in this purchase type and being prepared to move forward.
Best Wishes on your home search!
Keller Williams Realty Integrity NW
Licensed in MN
Oh boy I LOOOVE your question. Short sales can be problematic. They usually take a REALLY long time to finish and, sometimes, don't go through at ALL, after months of waiting.
It's all about making sure your expectations match what your needs are! If you are someone who needs to buy and close by a specific time (maybe because of a lease or something) then short sale properties might not be right for you. If you expect there to be a higher level of risk about the condition of the property and a high likelihood that the deal may NEVER go through, you are well prepared to deal with the volatile nature of short sale transactions.
Finally, it will be important for you have an agent to be your navigator through these tricky waters!!!
No need to "skip over" short sales, just know what you're getting into. As many have commented, there are some pitfalls to consider.
First, your timeline: If you have time to wait and aren't compelled to move or buy (other than for your own convenience or desire) then short sales may still be worth looking into. The closing dates can be fairly quick (if you're working with a seasoned short-sale Realtor as the listing agent) to quite long and at high risk of not closing at all, if the listing agent and/or lender(s) are not ready to move the property in an expedited manner.
Second, don't expect your offer (even if accepted by the Seller) to be your final price! Unlike an REO property, short sales have two parties who must BOTH be satisfied with the terms and conditions of the purchase agreement. Sometimes a short sale listing will be priced as a "low ball" - say $120K - and after the Seller accepts your offer for $120K, the lender (who gets to be the bad guy in this scenario) counters with an offer of $140K! Obviously, the Buyer could choose to walk away in that scenario (not accept the counteroffer), but does the Buyer want to start the showings and offer process all over again on another property? Some Buyers do and some don't. Just be prepared for a counteroffer from the lender(s) - even AFTER the Seller has accepted your offer without changes.
Third, be prepared for an entire "addendum" package from the lender which will specify that it supersedes some portions of the purchase agreement. If you have concerns over the verbiage in such a document, consider legal advice in reviewing this addendum so you are certain of what you are agreeing to when you sign it! So, the cost of an hour or two of an attorney's time might be a prudent, additional cost for you in a short sale purchase.
So, as with most things in the purchase of real estate, proceed with caution and gather wisdom. There are some excellent values in the short sale market and you won't be disappointed if you know what to expect.
There are always story and whos knows which ones are true and false. I have doing short sales for the past 3 years and have closed over 30 short sales with no horror stories to tell. I believe short sales can be better deals sometimes in comparison to an REO. Yes it's time consuming, but may be worth it in the end. Ask you realtor to do the correct research on the home before making on offer. Good luck! Hope everything works out.