The challenge with "shorts" is sometimes the agent is kind of fishing for a offer to see if the Lender will accept and too often they won't as it is too low. This can then be time consuming but of course you aren't locked into the deal until the Lender approves and you accept so you can continue to look.
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The simple difference between a short sale and foreclosure is that the short sale can take significantly longer. This depends on the agent's experience handling short sale, and a big part of it depends on the lender and the cooperation of the sellers. A regular purchase is the agents dealing directly with ready and motivated sekkers, Some short sales will fail due to issues in getting utilities turned on, disappointing inspections (which frankly could happen on any sale, but more so on a short sale.) and missing other properties on the market while you wait. If there is repair work to be done prior to closing the sale, the short sale lenders typically will not make repairs. However, this said, it is definitely worthwhile to look and consider short sales if you are not in a strict timeline to acquire the property.
Karen Morrison, Licensed in the State of Oregon,
Legacy Real Estate
Some short sales are more difficult than others. It depends on how good a job each property's listing broker has done in preparing his/her listing for the short sale, and on what lender the seller has. Short sale properties can be time-consuming and frustrating to work with, but they can pay off in a big savings over current market prices. However, you can often also realize similar savings on REO (foreclosed) properties, but without all the wasted time, money and headache. Most active brokers have experience dealing with both short sales & foreclosures.
Many short sales are eventually completed through time and patience. Many other short sales, however, blow up at the last minute, when the property ends up going to foreclosure, despite the accepted short sale offer. This is all perfectly legal, and not uncommon. All contracts and short sale documents must be read carefully.
I would not recommend against a short sale, but I would recommend that you hire a good agent to counsel you as to risks and benefits, especially as they apply to specific properties that are on the market. Only then, can you know if a short sale might work for you.
Time and certainty. The time will be unknown until you get approval, anywhere from 60-120 days or more, if it even comes. Many short sales are either declined without a counter offer or are foreclosed on while in process. You can go 6 months and even have an approval only to find the banks foreclosure department isn't speaking with the short sale department and the home is gone.
As a first time buyer, looking for a primary residence I would discourage you from riding the short sale roller coaster. The frustration and disappointment is more than most first timers need to deal with.
Pros: Some great properties at great prices oftentimes from sellers that haven't trashed and/or stripped the house of everything.
My tips: Have a rock solid mortgage pre-approval. Work with a seasoned agent who has a ton of experience working with shorts. Worth it if you have the luxury of time.
First letâ€™s explore the pros;
Price â€“ even though the market establishes price/value for almost every home sold it is accurate to say that short sales are typically sold at under-value prices.
Condition â€“ typically short sale properties remain occupied long into the listing period and are therefore likely to have fewer and/or less severe negative or neglected conditions.
Financing â€“ better condition generally means easier financing
Seller cooperation â€“ in most cases (if the listing agent has done their job well) the owner realizes it is in their own best interest to cooperate and expedite the transaction.
Equity- because the homes are sold in distress it is somewhat more likely the buyer will find themselves in a positive equity position sooner.
So then on to the cons;
Time â€“ short sales mean there is another interest (bank, lender, and investor) involved in making decisions. This can cause a transaction to take unbelievably long periods without any clear explanation as to why.
Frustration â€“ because the buyer finds themselves at the mercy of someone (bank, lender, investor) they and their Realtor never get to communicate directly with, it leaves you feeling somewhat out of control of your own life.
Fail to close â€“ sometimes the transaction takes so long the lien holder decides to foreclose on the homeowner, leaving the potential buyer with nothing to purchase
Bottom line is this. If you have a place to live without strict duration time limits and can find yourself a knowledgeable Buyerâ€™s Agent Realtor with multiple closed short sales experience there are great deals to be had.
PS. No one can walk you through a short sale better that a trained, qualified, professional Realtor
If your looking in the Salem area I'd appreciate the opportunity to visit with you.
Once again Good Luck, home ownership is a wonderfully fulfilling experience.