Home Buying in 20121>Question Details

Scott, Home Buyer in 20121

is buying a short sale bad?

Asked by Scott, 20121 Sun Oct 18, 2009

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21
Scott,
Buying a house on short sale is good.
The process can be testing.
It can take 45 days to 14 months and the bank might still decide to foreclose.
Right now there r very few bank owned properties or regular sales in the market(in DC metro area).

rgds,
Ramesh Chandra
703 635 8209
mepcigroup@gmail.com
1 vote Thank Flag Link Sun Oct 18, 2009
Anyone notice this question is from October 2009?
0 votes Thank Flag Link Fri Oct 29, 2010
That depends. If you over pay for the home then yes. You can find very good deals in short sales in todays market. You still need to do your homework and have a good local Realtor work with you to help determine the current fair market value for the home you offer to buy.
Web Reference: http://www.gregrohrer.com
0 votes Thank Flag Link Fri Oct 29, 2010
Buying a Short Sale

Buying a short sale is not like buying a property in a traditional way. A short sale may have some risk but it also can be very rewarding. When you are searching for a short sale you will want to make sure you are prepared. Here are some things you will need to consider.

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. 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.

If you have the time to wait, a short sale is a good way to go. One thing to be sure to ask when purchasing a short sale is, "who is handling it?" Is the Realtor an experienced short sale expert? Or is the listing agent using a Short Sale company that strictly focuses on short sales? By having someone with knowledge and expertise in short sales, it will make the process go much smoother and faster.

Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL tammyhayesre@gmail.com
0 votes Thank Flag Link Fri Oct 29, 2010
Apparently Trulia has a problem - my answer did not post properly, again :-)

Let me re-post it :-)

Scott,

Short sales are wonderful, but do not expect to purchase at a bargain price.

Treat a short sale as you would a regular sale with understanding that there is that additional contingency on the seller's side called the lender approval. This is why offering a full market price is a wise decision if you like the property and would like to own the home.

If you were the lender, would you want to sell at a bargain price while taking the loss?
If you were purchasing from the seller in a traditional transaction, wouldn't the seller expect you to pay the full market price?

Most short sales are in a better condition than foreclosures.

Short sales come with a CLEAN, MARKETABLE TITLE and GENERAL WARRANTY DEED, while foreclosures offer only SPECIAL WARRANTY DEED - this is an added bonus when purchasing a short sale.

Every short sale is different. It is important that the listing agent understands enough about the seller's circumstances to know if the seller will be approved for the short sale by the lender AND the listing agent has enough experience and dedication to keep the transaction on the right track.

It is important that the purchaser works with a knowledgeable buyer agent who knows to ask the listing agent the right questions and is able to offer the best advice to the buyer - every short sale is different.

Best Regards,

Vivianne Rutkowski
KELLER WILLIAMS REALTY
0 votes Thank Flag Link Fri Oct 29, 2010
Scott,

Short sales are great, but do NOT expect to purchase at a bargain price - especially if two lenders are involved.

Treat a short sale as you would a regular sale with understanding that there is that additional contingency on the seller's side called lender approval - this is why offering a market price for the property is a wise decision if you like the home.

If you were the lender, would you agree to sell the property at a bargain price while taking a loss?
If you were purchasing directly from the seller, wouldn't the seller expect you to pay a full market price?

Purchaser receives a CLEAN, MARKERTABLE TITLE and GENERAL WARRANTY DEED when purchasing a short sale - only SPECIAL WARRANTY DEED with foreclosed property. This is an added bonus when purchasing a short sale.

Most short sales are in a better condition than foreclosed homes.

Every short sale is different. It is important that the listing agent understands the seller's circumstances enough to know if the seller has a chance to be approved for the short sale AND the listing agent has the experience and dedication to keep the transaction on the right track.

It is important that you, as a purchaser, have a buyer agent knowledgeable about the short sale process to advise you.

Best Regards,

Vivianne Rutkowski
KELLER WILLIAMS REALTY
0 votes Thank Flag Link Fri Oct 29, 2010
Hi Scott,

I am curious Why are you asking? Have you had a bad experience or your friends or internet told you Halloween Stories about short sale?


Monika
703 626 3327
http://www.RealtyGeeks.com
Web Reference: http://www.RealtyGeeks.com
0 votes Thank Flag Link Fri Oct 29, 2010
Hi Scott,

Buying a short sale is not bad as long as the results are that you get the property in a reasonable amount of time but here lies the dilemma a short sale can take a long time and unfortunately there are no guarantees.
My advise if you want to buy a Short sale is choose a realtor who as close at least two before with buyer and make sure you tell him or her to show you only short sale with listing price approved by the bank and if you make a full asking price offer on one of these you should close within a reasonable period of time. All the best

Brian Halstead
License real estate broker
Halstead homes realty
786-303-1046
0 votes Thank Flag Link Fri Oct 29, 2010
Scott, I have a detailed set of posts on this that may assist you:
0 votes Thank Flag Link Mon Oct 19, 2009
Another thing to think about with writing on a short sale is just because you get an offer accepted does not mean you have to stop looking. If you have a good Buyer Agent who knows how to write the offer, you can keep looking in case something better comes along, until such time as the you get approval from the bank for the short sale.
I would be happy to explain the options for terms in more detail. It is really better to do it directly so feel free to call me and we can discuss it further.

Kathy Stark
Accredited Buyer Representative
Certified Default Resolution Specialist (Short Sale)
703-201-9656
Weichert, Realtors
kathystark@weichert.com
0 votes Thank Flag Link Mon Oct 19, 2009
Scott,

No short sale is alike. They depend greatly on the lender involved and the listing agent.

If you do NOT want to be held a "hostage," have your agent write in a time limit into the offer - if your offer is strong, it should motivate the lender to act on your offer much faster.
0 votes Thank Flag Link Mon Oct 19, 2009
No just drama

I have been a listing / buyers agent MANY REALTORS refuse work with short sale or foreclosures not due to agent fault how banks do business.

You are protected by inspection, appraisal, however if you don't receive a response from offer submitted within 7 -10 working days keep moving on with your search. Amazes me people wait for monthhhssss for a bank notification sales offer accpeted MOST likely no and never will.

If you are under "gun close by 11.30.09" best move quickly.

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Lynn911

http://www.lynn911.com
0 votes Thank Flag Link Sun Oct 18, 2009
Buying a short sale can be time consuming. I suggest my clients focus on finding "the house" they want and then work on buying it. I don't want them limiting themselves to looking at just short sales or just foreclosures / bank owned properties or just regular owner sales. Find what you want first. If you like a short sale house be prepared for a long process that could be over a year and may not end with you purchasing that particular house.

Good luck with you house hunting!!

Stan Reed, Realtor
Keller Willaims Realty
Web Reference: http://StanTheRealtor.net
0 votes Thank Flag Link Sun Oct 18, 2009
Scott-buying a short sale isn't bad from the standpoint of a buyer it just requires an understanding of the process that it takes to get from offer to closing. If you need to settle on a new home in the next 30-45 days a short sale may not be the best option for you. If you have longer and find a home that is right for you and your finances then being patient could pay off big time.

Make sure you educate yourself on the process and work with an agent who will represent your needs.
Web Reference: http://varealestatetalk.com
0 votes Thank Flag Link Sun Oct 18, 2009
"I notice some of the agents below who offered to help are in PA, CO, or IL".

Kathy,

Please limit your comments to those that apply. I will speak only for myself in saying that my response was a general statement to a question, not a solicitation for business as others here have posted.
0 votes Thank Flag Link Sun Oct 18, 2009
Scott,

If you can successfully buy a "short sale" and save yourself some money there is certainly nothing wrong with that. However, it's the short sale process itself that can be very time consuming and difficult.
0 votes Thank Flag Link Sun Oct 18, 2009
Hi Scott,
My name is Nestor Colon. I'm a realtor with Exit Realty The Tri-State Group. To answer your question to the best of my ability I have to ask what is your goal first and foremost? Depending what's your goal can change the response. If you are looking for a great deal, short sales are great. But, just remember all great deals do not have to be short sales. Short sales require diligence and alot of patience. It's not like a REO in which you can get a faster response. A short sale in the beginning phases has to be assigned and the waiting period varies and can be lengthy. Also, your method of buying whether cash or financing plays a part also. If you would like to discuss this further please give me a call at 215-200-1089 to schedule an appointment. I look forward to speaking with you. Thank you and enjoy your day.

Best Regards,

Nestor Colon, Realtor
Exit Realty The Tri-State Group
1080 N. Delaware Avenue Suite 200
Philadelphia, PA 19125
C: 215-200-1089
P: 215-425-2200
F: 215-425-6100
ncolon@exittristategroup.com
nesfc76@yahoo.com
"WORKING TODAY TO MAKE A DIFFERENCE TOMORROW"
0 votes Thank Flag Link Sun Oct 18, 2009
Scott

No, by no means is buying a short sale bad. The most important thing is to have a Buyer Agent who is very familiar with short sales and the short sale process. It is also important that the Listing Agent be familiar with the process. The other thing you need is patience. If you need to settle in 30 days, a short sale is not for you. Short sales can take time. Some banks are better than others too.
I am a CDRS (Certified Default Resolution Specialist). What that means for you is I have taken additional training to better help buyers and sellers with the short sale process. I have access to info for just about every lender and the forms they need for a short sale.

Remember, Knowledge is Power.

Get back to me and I would be happy to help you find your dream home. Short Sale, Foreclosure, or Regular Sale.

Kathy Stark
Weichert, Realtors
ABR, CDRS, GRI
703-201-9656
kathystark@weichert.com

If you have currently signed an Exclusive Right to Represent the Buyer with another Agent this is not meant to solicit.
0 votes Thank Flag Link Sun Oct 18, 2009
Short Sale are good deals just require, TIme and Patience on buyer end and a Skilled Negotiator on Sellers end. Just know what you are getting involved in and it can be better but Not always!!

Getting Knowledge is the key!!

Monika
Web Reference: http://www.Realtygeeks.com
0 votes Thank Flag Link Sun Oct 18, 2009
How do you mean bad? Do you mean is trying to buy a short sale a bad idea financially or because of the process involved?

You would have to see how the short sale price compares to comparable homes of the same size, condition and location. Usually the home is listed at market value. (Same value as any other house listed that is not a distressed home). A short sale home is not necessarily a bargain financially but may be an opportunity to purchase a house that under normal conditions may not have been on the market. A short sale home usually is in better condition than a foreclosed home. (Not always the case but usually)

If you choose to go the route of a short sale keep in mind several things. The process can take a long time. You must be patient and not get discouraged or be pressed for time. Also, it is becoming more common to end up in a multiple offer situation with short sales. The banks are looking for the best and highest offers, so your offer should probably be your best possible offer from the beginning. The banks will review any offers received and choose one. The rest will be rejected and you have to start the process over.

There is much more involved here with a short sale so make sure that you do your homework and know exactly what is involved and what you are getting into from the beginning. Best of luck to you.
0 votes Thank Flag Link Sun Oct 18, 2009
Buying a Short Sale is a good idea. You are able to purchase a property at market vaule or sometimes 10% below market value. many people are not selling their homes right now because the values are low. Many times the only options for a buyer is a short sale or a foreclosure. The only catch is that short sales take a long time to process because the bank has to give its approval to accept an offer for less than is currently owed on it. The bank response time ranges from 6 weeks to 9 months. If you find the perfect house and you have time to wait. There is nothing wrong with a short sale.
0 votes Thank Flag Link Sun Oct 18, 2009
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