Buying a home thats short sale approved?

Asked by Babymama, Dearborn Heights, MI Sun Jan 22, 2012

I was just wondering if buying a short sale home was a good idea. I have heard that its not but I wanted to get anothers opinion. Alot of houses are short sale now because the owners couldnt keep up with the mortgage or whatever the case is. Should I even go about looking at the home?

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Sheree Thein, Agent, Prairie Village, KS
Sun Jan 22, 2012
Buying a home that is a short sale can be a lengthy process and many buyers give up before they get to the closing because it can take so long to get answers back from the mortgage holders. If you can wait three to five months to close, it may be worth pursuing one. If you're the patient type, it may be worth looking at them because the price may be very competitive. How long it takes will depend on whether or not there are multiple liens against the property, which lender(s) you're dealing with, and how proficient the listing agent is at handling short sales and whether the listing agent has dealt with the same lender in the past or not. If another buyer has already attempted to purchase the property and didn't quite get to closing, some of the hurdles may have already been jumped. Both the listing agents and the selling agents have to be hard workers and very persistent.
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Pam Bava, Agent, Rochester, MI
Mon Jan 23, 2012
Hi There,
All answers below are great and yes you do need patience but with that said I have also had them close in a week or two and others have taken months. If it is new on the market you might expect a longer wait. If it has more then one loan attached to it that can take more time. If you are working with a Buyers Agent their communication with the sellers agent can give you a better idea. The seller has to work closely with the bank and make sure they are moving things along. I've seen sellers that are mad about the whole situation and have trouble getting their paperwork complete, this is a very important part of SS and those deals will take longer of course. Once you submit an offer the seller will probably accept it, the bank is the final decision maker and this is where you need patience. Each bank has their own way of doing them and agents only get information when they decide to let us know something, this can be frustrating. If you see a private owned home or a bank owned property you will get answers faster for sure.

Good luck
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Jim McCowan, Agent, Arlington, VA
Mon Jan 23, 2012
If the short sale is TRULY approved and you're able to see a copy of the approval letter from the bank then you'll save yourself a lot of time! Make sure you have an experienced realtor to helpm you through the process.
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Joe Bertera, Agent, Plymouth, MI
Mon Jan 23, 2012
There are good deals on short sales if you are willing to wait through the process which averages 3-6 months to get an approval. If the listing says already short sale approved I would ask to see a copy of the approval letter to make sure it is still valid and can be transferred to the next buyer and if that is true it could be a much quicker process.

If you would like to discuss in further details, please feel free to contact me anytime.

Thanks. Joe Bertera. 248.521.6443.
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Haig Istambo…, Agent, Rochester, MI
Mon Jan 23, 2012

Good explanations below, but I wanted to give you one more perspective. Short Sales are good if you have time and patience. Unless the sale price is PRENEGOTIATIED with the bank and ready to close quickly, you will be waiting anywhere from 1 month to 1 year, with most usually taking 3 - 6 months.

I had one Short Sale approved within a week ( I couldn't believe it either), and I had another one take about 10 months. Needless to say, you never really know how long it is going take, the bank makes all the rules and takes their time in negotiating, because most are overwhelmed.

The good points of a short sale? The homeowners usually remain in the home and take care of the home while the process is ongoing. They want to leave the home in good condition so they don't have any issues with the lender. So you get a home usually near foreclosure prices but without as man repairs.

So ask your self, do I have time to wait, usually without any answers for weeks or months? Do I need to move immediately? Am I willing to wait for all of that time and possibly have the bank NOT approve the deal?

I would go see the home and ask the agent to see if the Short Sale was prenegotiated. If you love the home and are willing to make an offer, and the wait becomes too long, yes you can cancel. SO really it is the best of both worlds.

Feel free to contact me if you are not working with an agent, we are the number SHhort Sale company in mIchigan.

Thanks again,

Elais Realty
(248) 379-6547
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Elizabeth H…, Agent, Manasquan, NJ
Sun Jan 22, 2012
As long as you understand that the home prices are set by the bank; the bank usually does not drop the prices by much and rarely will fix things up not too mention it may take a long time to close. If you know this up front then go for it.
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