Here is a primer on short sales.
The Truth about Short Sales
With all the homes for sale out there and the many deals available, many buyers looking for a deal concentrate on short sales. This MAY not be in their best interest. First, some definitionsâ€¦â€¦â€¦..
Short sale, Pre Foreclosure, Forclosure: All mean the same thing. The home or condo is worth less than the amount the homeowner owes to the bank. There is a cloud on the title. The real estate office that has the listing has picked what they consider to be an acceptable price and have listed the home at that price WITH NO ASSURANCE THAT THE BANK WILL ACCEPT THAT AMOUNT. In fact, they write in the listing â€œsubject to third party approvalâ€. The home can have an OFFER put in on it.
Bank owned, REO: Both mean the same thing. The foreclosure process is over, the title is clear and the home can be BOUGHT AND CLOSED ON.
Seller owned: The home can be BOUGHT AND CLOSED ON.
Some drawbacks to short sales
â€¢ Short sales are generally vacant and neglected.
â€¢ Short sales have been without power and air conditioning for sometimes a year or more in our humid subtropical climate (can you say MOLD).
â€¢ Short sales have not had interior pest control (roach & bug Heaven)!
â€¢ Short sale lawns are infested with weeds and chinch bugs. Lawns are further stressed due to lack of water, fertilizer & pesticides. ( letâ€™s face it, most of these lawns are DEAD).
â€¢ Many short sales have been stripped of their appliances and fixtures.
â€¢ Some short sales have been damaged, even booby trapped by their former owners (sometimes unseen).
â€¢ A short sale is sold AS-IS, what you see (or donâ€™t see) is what you get.
â€¢ Many short sales do not come with a full warranty deed.
â€¢ A short sale has a 1st mortgage AND many times a 2nd mortgage. Some even have a home equity loan as a 3rd mortgage. Consequently, some short sales have as many as three separate banks/negotiations to be dealt with in order for a successful closing to take place. A short sale can have multiple competing offers unbeknownst to the potential buyer(s).
â€¢ A short sale has a loooonngggg period before the bank responds to the offer sometimes as little as a month but can be as long as of 4-5 months for ACCEPTANCE BY ALL PARTIES.
â€¢ A short sale, even after acceptance of the offer has NO GUARANTEE of a successful close.
â€¢ A short sale is NEVER guaranteed to close, but if it does, be prepared to wait as little as 90 days from start to finish or as long as a year or more!
â€¢ With a short sale, everything can look good for a long time and then COLLAPSE AT THE LAST MINUTE.
â€¢ Many buyers get â€œantsyâ€ and back out of their short sale offer so they can buy a home and close on it after wasting their time and money for inspections on the short sale
For a smooth buying experience, call Sue & Kevin Horan of Horan Realty Group @ 727-992-5566 or 727-967-1756