Waiting time and not sure when you will close then when the approval comes in you have to close quickly

Short definately doesn't refer to the time period it takes to get one closed! I've completed a list of pros for short sale home buyers:

No two short sales are the same. The major disadvantage of buying a short sale home is time (as long as you are purchasing a sound home with not major damages and sometimes the money saved outweighs this as well). If you have the patience and are not in the same situation as many home buyers (wanting to get in the home right now) then you may find a great deal. I have noticed that many realtors advise clients away because of the realtors wait time on closing the deal. If a client is advised properly then there shouldn't be any issues when informed on what to expect. Also, not all short sale homes are a mess. Many people care for their property regardless of the circumstances. I for one would never purchase a home at market price as long as I could find a great short sale or foreclosed property. You are reaping the benefit from helping someone or a family in a bad situation…what a deal.

These Realtors are absolutely right, MOST of the time! I just finished closing a short sale with 5/3 Bank that only took about 30 days from offer to close. So there are exceptions to the nightmares. Unfortuantely many the bank owned properties are just as difficult.

Hi David,

Disadvantages of buying a short sale:
- the price you see advertised is never approved by the seller's lender...meaning that you may never be able to buy the house at the advertised price
- it takes 30-45 business days to get an approval from the seller's lender...if one ever comes
- in most cases, multiple offers from different buyers are submitted for approval, meaning you are in a bidding situation
- in my estimate, at least 75% of short sale listings never get approved & end up at the foreclosure auction & then usually go back to the bank
- they require a level of patience that most people do not have

Advantages of buying a short sale:
- you may be able to buy the home...if you are lucky

I advise all of my buyer clients to not consider short sales, and, once they understand the reasons why, they all agree. You are probably better off buying directly from the bank or from a private seller who is not in foreclosure.

If you are considering purchasing a home soon, I advise you to interview some buyer's agents to find the one that best suits your needs. It is more important than ever to have proper representation to get the information you need to make good real estate decisions. Buying a home in our crazy market is a sure way to get a great deal on a property, but it will be a stressful, challenging, disappointing & frustrating experience. However, if you can weather these obstacles, you will get a home at a great price...probably cheaper than what it was sold for in 2003.

---
Paul Welden

One disadvantage is that--contrary to some of the advice below--it may not be a bargain. Consider this example--it's a property I looked at a couple of weeks ago: It's a 1950s house that hasn't been updated. It was bought in 2006 for $600,000. (It never, ever, was worth that.) It's now on the market as a short sale for $425,000. Comps are in the $395,000 range. It makes no sense whatsoever for someone to pursue that property. It's not in great condition, and really needs about $40,000 of work to update it. Plus, as a short sale, it could take months and months, without any assurance that the deal would go through. Meanwhile, in this particular neighborhood, prices remain soft. There's far more chance of values dropping there than going up.

Some short sales are bargains. Many are not.

There are several disadvantages. First, and probably most importantly, you are buying the property as-is. If the AC doesn't work, the seller is under no obligation to fix it, etc. And note that a home warranty does not cover pre-existing conditions, so buying a home warranty isn't necessarily the "cheap fix".

Second, it takes at least 30 days to get a response from the bank of an acceptance to your offer. During that time, a lot can happen.

Third, depending on how savvy your agent and the listing agent is, your offer may be shopped around, creating further frustration, when you lose out on the home, because a better offer came in after yours.

If you can get a property below market value, enough to accept it as-is, it can make sense. Other times, it doesn't make sense...every deal has to be evaluated on its own merits.

Only disadvantage is time. The process to purchase a short sale is the same as any other purchase, but because the offer must be submitted to lender for approval you can expect to wait up to 2 months to get a yes or no. Short sales can be a great way to get into a home at a below market price. REOs are also good, but usually result in bidding wars.

You can read my article at the link below on buying short sales which includes some additional references. As noted already, it's a process that requires LOTS of patience.

The advantage of course is the price. The disadvantage is the amount of time a short sale can take. If you place an offer you need to plan ahead. It may take a couple of months to get an acceptance, and once accepted it can take 60 days or more to complete. Also, if there are junior leins and the junior leinholders do not wish to negotiate or agree to an offer the short sale will be denied. There are alot of great articles on the web, and you can always contact a realtor for information. Good luck!

In short--it's not a short sale! It takes forever! The banks are so busy with foreclosures and getting an answer out of them is like pulling teeth! It pays to consult a realtor.