Home Buying in Austin>Question Details

Kyle Jancove…, Real Estate Pro in Austin, TX

As a buyer, what are the pro's and con's of a short sale?

Asked by Kyle Jancovech, Austin, TX Wed Jan 25, 2012


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1. Can potentially get a great deal


1. Can take a very long time to close
2. Seller usually retains right to market property up to close (someone can "swoop" in and steal it from you the week before closing after waiting patiently for months to close)
3. Listing agent might have not submitted a complete SS package to lender
4. Listing agent may have never closed an SS before
5. Bank may take forever to respond to offers/inquiries
6. Could be more than one lien on the property - and lienholders may not agree on how the proceeds should be allocated between them.

The pro's outweigh the con's for me personally, as a buyer, due to the sheer amount of deals out there (foreclosures, etc.). However, if the other side of the transaction has an agent/attorney who are well-versed in these transactions..........it "can" go smoothly.
2 votes Thank Flag Link Wed Jan 25, 2012
Pros: you can sometimes get a great deal.

Cons: it can drag on for many months with no guarantee of closing. Knowing upfront that the listing agent and seller have established a relationship with the lender's short sale department will go along way in determining how long the process can take.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
0 votes Thank Flag Link Fri Feb 10, 2012
Sometimes you can get a great price on a property.

cons: The timing lies with the Bank that owns the property, You don't know what has happened in the house because you have no disclosure.

That is straight forward and simple.

Give me a call if you have any other questions.

Glenn Smith - REALTOR
Capital City Sotheby's International Realty
512 771 6371
0 votes Thank Flag Link Sat Feb 4, 2012
You've had a lot of good answers, I've had some that went rather well and tohers that were a bear. They take a lot of documentation and persistance on agents part and patience on both the buyer and sellers part as the same questions and cos requests may come up more than once. Short sales may be short on purchase cost, but long on time.

If you have someone looking to get in in 30-45 days, I would not suggest a short sale.
0 votes Thank Flag Link Wed Jan 25, 2012
Terry gave the best answer Kyle. Only Pro, is get a property well under normal market value. Cons; even more than Terry listed. Only attention to detail, persistent, and experienced agents should tackle these transactions. They are not right for everyone. And If you ever see a pay-check it may be 6+months and less than was agreed with original owner.

I just closed one 2 months ago with ASC(Subsidiary of Wells Fargo) closed in 5 months with the agents paying for 2 outstanding trash and sewer bills as well as being knocked down from 6 to 5%. Banks attitude was if this is not agreeable tell us now so we can continue to foreclose on the homeowner. Owner received Nothing because it wasn't a HAFA transaction, and buyer swore they didn't have any more money to contribute.

So Kyle in all the time that was spent on this transaction, another 3 non-distressed sales may have been completed?

Good luck if you choose to do them,

0 votes Thank Flag Link Wed Jan 25, 2012
The others have summed it up nicely: There's nothing short about a short sale!
0 votes Thank Flag Link Wed Jan 25, 2012
As a buyers agent you really need a listing agent who is working a short sale to have great communication with you during the process of working the file. Ask for a weekly update (I prefer email). It keeps you and your buyer up to date on what is going on. And before you make an offer I ask my red flag questions before you make an offer.

1. How many liens on the property
2. What kind of liens (Tax, HOA, Federal Tax)
3. What is the status of the short sale file
4. What kind of loan does the seller have with their lender.

If the list agent can give these answers easily when asked, might think long and hard before making an offer.
0 votes Thank Flag Link Wed Jan 25, 2012
The main con is time. Although it is called shortsale, it takes a long time for bank to get back with you and for you to close.
Other than that I think there are some great deals out there.

I hope this helps,
0 votes Thank Flag Link Wed Jan 25, 2012
Terry has summed it up. I would add not to become emotionally invested until you walk away from the closing table once its closed and funded.

Warmest Regards,

Vanessa Nunez
VOX real Estate, LLC
0 votes Thank Flag Link Wed Jan 25, 2012
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