Home Buying in Florida>Question Details

Shinymetalbi…, Home Buyer in Tampa, FL

When looking at buying a short sale in Florida, what is the average wait time for a property that is not pre-approved?

Asked by Shinymetalbits, Tampa, FL Thu Jul 21, 2011

I've heard that there is little negotiating room with the price of a short sale (which is understandable as you want the bank to approve your offer) but is the buyer usually stuck with all the closing costs because the seller is in distress?

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Not trying to be cute, but the actual answer to the question is forever. That's because more than 50% of short sales still fail -- they never get closed. If you restrict this to short sales that actually close the feeling I get from the ones I'm working on is around 4 months.

In terms of your second question, no the buyer is not stuck with all the closing costs. The seller's lender is presented a pro-forma HUD closing statement that includes the normal distribution of closing costs between buyer and seller.
2 votes Thank Flag Link Thu Jul 28, 2011
Shiny,

Just closed a Florida "short sale" today in which the only expense to the buyer other than the home's purchase price was $18.50. It's a matter of wording the contract appropriately and the bank approving it.

There are so many variables with a short sale that predicting a reasonable duration would be impossible. But plan on 3-6 months for a unapproved short sale and there are no guarantees.

Good luck,

Bill
2 votes Thank Flag Link Thu Jul 21, 2011
First of all, you need to make sure that you have enough time. It takes anywhere from 30 days to 6 months or even more to get an answer on a short sale. It really depends on many factors. It requires a proof of funds letter if paying cash or a pre-approval letter from a lender if obtaining a mortgage. The seller must approve the purchase offer before it gets submitted to the bank. The bank may come back with a counteroffer or reject your offer completely. In some instances you may not even hear back from the bank at all.

Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure.

One of the benefits of buying a short sale is that the bank is typically willing to accept less money for the property because of the time and risk involved. So you generally are getting the home at below market value.
1 vote Thank Flag Link Wed Jul 27, 2011
I work primarily with the Short Sales and represent mainly the Sellers of Disstressed Properties: must say that the average time it takes to close a Short Sale from a moment an offer was received and excepted by Seller/Owner of the Property is about 45 days, but again some Lenders do take their time and it may go up to 90+ days (espesially if it is a Goverment Loan, like FHA: takes a very long time to close, since the File goes through tons of Negotiators at the Bank and FHA itself).
Also, keep in mind that todays market is a very popular one for the Short Sales, it is easier to find a Property with a Short Sale Condition then a Bank Owned one, so majority of Real Estate Deals today are Short Sales and they get a good % of all Buyers out their on the market, which creates, in majority of my cases, some type of an Auction for Best and Highest Offers from all potential Buyers.
So, please keep in mind that sometimes the asking price will NOT win you a property of choice. Experienced Realtors do price the Short Sales very carefull in a way that the Listing will not only bring potential Buyers, but will bring a good offer which will pass the Appraisal and Broker Price Opinion from the Lenders side who is approving such Short Sale, as well as cover all Liens on the property within agreed limits of pay off.
There are a lot of things involved in the Short Sale buying and selling process, that is why it is very important to work with a Short Sale Pro.
-Alena.
1 vote Thank Flag Link Thu Jul 21, 2011
Thanks Bill :D

I had heard that the closing time could be from 3-6 months for a short sale normally. There are so many short sales listed when viewing properties that I was wondering if the banks were trying to move the properties quicker with the quantity that are up for short sale. That's very helpful to know when considering when to move.
1 vote Thank Flag Link Thu Jul 21, 2011
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