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What's the typical process when buying a short sale?

Asked by Trulia, San Francisco, CA Mon Mar 5, 2012

How long does it take? What are some pitfalls?

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Answers

7
That's a loaded question. It all depends on the bank, and the responsiveness of the sellers. The sellers have to provide the bank with all kinds of documents, including back taxes, bank account info, paystubs, etc. When you submit an offer, it typically goes through three different areas within the short sale department. The offer goes to the listing real estate agent, who then gets the sign off from the seller, then it goes to the bank for the approval and negotiations. The bank sets its own deadlines. It could respond in 48 hours, or it could respond in 48 days. The bank can accept the offer, or it could come back with a counter offer. I've had short sales approved in as little as a week (Wells Fargo) and as long as nine months (Bank of America). Hope that helps. If not, feel free to ask more questions. I've been both a list agent on short sales and a buyer's agent on short sales. Either way, it's not an easy process, it takes a ton of patience and a lot of perserverence.

Good luck,
Laura
4 votes Thank Flag Link Mon Mar 5, 2012
Ditto to ALL of these answers. Another thing to remember is PLEASE don't waste the seller's time if you are not willing to wait out the process. I have had experience with too many buyers wanting to back out after a month or two and it is so hard on the seller to have to start the process all over again.
Another thing to remember is just because a property is a SS or foreclosure doesn't mean that it's list price is inflated. Most often the list price is VERY close to what the bank has agreed to take for the property. Again, don't waste everyone's time going in with a low ball offer.
Also, ALL SS's and foreclosures are AS IS sales....have an inspection but don't expect the seller, the bank, or anyone to make any repairs. It just won't happen. You need to know what you are getting but unless something pops up on inspection that would make the home uninhabitable you will be responsible for any repairs.
Good Luck!
3 votes Thank Flag Link Mon Mar 5, 2012
I have read that 85% of short sales never close. Please understand the odds of closing are not 50%. Most banks are not timely with any responses.
1 vote Thank Flag Link Mon Mar 5, 2012
Hurry up and wait....they can take as little as about 30 days or last over a year. You never know. If you really love the home and are willing to wait then make an offer and be patient. If you don't want to deal with the hassle then move on. I have a Short Sale FAQ on my website. Check it out at http://www.nohasslehomesindy.com
1 vote Thank Flag Link Mon Mar 5, 2012
The real difference between buying a short sale and other purchases is time. Often it may take 2-3 months for a lender to approval a short sale. If you have time on your side, a short sale should not be over looked. We have been able to close short sales in a short period of time, but usually it takes the lender some time to get everything approved and under control.
0 votes Thank Flag Link Mon Mar 5, 2012
This is a pretty easy process if you select an experienced Broker and Realtor who knows the market and knows the appropriate financing sources for you. It can take from 30-60 days depending upon the lender involved. The main pitfall is working with an agent who can't spell agnet.
0 votes Thank Flag Link Mon Mar 5, 2012
Laura is absolutley correct!

Loaded question:)

However she gave a very good description of how a SS process should/could go. Best of luck! My advise, if you can wait out for a deal, a SS may be the best thing to be looking at now.
Web Reference: http://TheVearusGroup.com
0 votes Thank Flag Link Mon Mar 5, 2012
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