Congrats on your loan approval!!!!!
The short sale proces can be loneger than a regular sale, but they are not taking as long as they use to.
I would recommend that you be very ptient if you write an offer on a short sale. On a regular sale you can usuually close a FHA loan deal in 45 days. With a short sale it can be 75 to 90 days.
Things to know about short sales:
1. Tthe first stage of the short sale is getting the seller to accept your offer and submit it to the bank.
2 The bank has to approve the terms and conditions of the agrrement you and the seller have reached. In some cases the bank may not approve the agrrement you and seller have made. For example they may want a higher sales price.
3. If the home has more than one lien holder, you will have another issue to resolve. The jr lien holder may ask for a portion of the amount owed them or they may not agree to the short sale. Often times the buyer may be asked to pay or all of the amount requested by the jr lien holder.
4. If the property is a condo/townhome delvelopment or any development with a HOA, and there are out standing HOA fees you will have to pay the past due HOA fees.
5. In A SHORT SALE, the seller is in no position to give the buyer any credits.
6. Seller may not be in a position to make any repairs.
I wish you much success.
Kawain Payne, Realtor
From my experience, Short Sales suits better for investors than owner-occupying buyers. Investors aren't usually looking for a place to move in; they have plenty time and patience to wait out, 45-60 days if lucky. OO-buyers however, usually have a target date and have made plans on moving, unless they understand the nature of Short Sale and don't mind waiting a few months for a Yes/No answer from the bank.
So my advice to Owner-Occupying buyers:
-- Be sure to have your agent find out the exact type of hardship current owners are into, this way you can assess how likely bank will approve the Short Sale if at all;
-- Don't get too excited about the listing price you see on a short sale! Too many times I had been asked by buyers "how come the price is so low? Is it an error?"
-- Remember, listing price on Short Sale may not be the finally approved price by banks; in fact after 2 months of wait, they can come back to you asking for more. Thanks to due diligence of listing agents and BPO's, nowadays, the listing prices on Short Sales reflect more like current market value;
-- Another common misconception is you can always get a good deal on a short sale, not true! If it's a hot deal and too many buyers pour in, then it could be overbids that get the deal, in other words, the winner may be paying more than its current market value;
-- So don't ignore the many regular sales out there, in a distressed market where these regulars fall victim to their value, you'll be surprised sellers' willingness to compromise.
My best advice is to seek the type of home you are are looking for without distinguishing between short sales, traditional sales, and foreclosures. Make the house your goal and be prepared to work witht he different types of listings you will find. Your Realtor should be comfortable and experienced with all types of sales.
Make your offers based on current market values (not list price) and offer to put some money in escrow as a deposit for 2 months while waiting for approval. Leave a little room in your offer to account for some negotiation and unexpected minor repairs...but still keep the offers NEAR market value.
There are many things a good short sale agent can examine (if the seller will share) to help pick and choose the different houses with the best chances of getting approval. (ie realistic hardship, personal assets of seller, sellers willingness to sign a promissory note, sellers willingness to make a cash contribution). Best of luck!
dragging on to a point where we no longer want to buy. We are approved for the ChDAP loan as well.
But we'll see what happens.
Thanks, all for your quick answers.
NMLS # 6395
Financing Kentucky One Home at a Time
Choose an agent who is very good at communication along with a property represented by an agent who is also good at communication. Both are where you can have impact. When the seller is not motivated to sell and is really just trying to mess with everyone for as long as possible you need to find that out early. good luck
There are some short sales that are quicker because of the lender behind the mortgage. In general, a Wells Fargo, Wachovia or World Savings short sale are by far the quickest. Next would be Chase, US Bank and a few others. It is my personal experience that the hardest and longest short sales have by far been BofA. They have the dubious award of the longest, toughest, longest, did I already say longest??? I still need to add a few more longest to really exemplify just how long theirs take!
Your agent can also make a BIG difference by asking the right questions to the listing agent when dealing with a short sale lender...hope this was helpful.