Well I am not going to tell a horror story about short sales because I was the transaction broker for the Buyer on a Bank of America short sale, cash transaction that closed in 60 days. On the other hand, same bank, cash, it took 7 months. There are a great deal of obstacles that can present in a short sale. Many people believe cash influences the banks to take a lower price. Not so. Primarily the bank want to get what the appraisals and broker price opinions are telling them the home is worth based on the most recent sales of comparable homes.
Bottom line is, there is no telling the timeline on a short sale. Find a good RealtorÂ® to work with who understand the short sale process and they will be able to do some research up front to determine any obstacles the will delay closing and determine how far along in the short sale process the homeowner is.
Keep in mind the following when purchasing a short sale:
Make sure that you find out if the currently homeowner has paid the HOA dues current! The banks generally will not pay more than the equivalent of 12 months dues. Once the dues become delinquent, the association will usually seek the help of the attorney and a $325 past due balance can quickly grown to over $5,000 or more and the bank won't likely pay it, and the homeowner usually can't because they have a financial hardship. Always ask the question if the association dues are paid current.
Three other items to be aware of, at least in the area I sell homes, the buyers are being required to turn the utilities on for inspections. This should be disclosed to you, but I have found that many times the listing Realtor is not disclosing this. This will require YOU to put up the deposits and pay the expense of turning the utilities on. Once last item, make sure you ask if there are any outstanding assessments that have not been paid that the seller may be unable to pay, like a road pavement assessment or special assessment. Find out if there is a negotiator fee. It is not uncommon for there to be a negotiator fee, however, you should know what that up front. Everything related to the transaction should be listed on your HUD settlement statement - no outside deals.
Fred Strickroot, RealtorÂ®, MBA, CDPE
Florida Lic. Real Estate Brokerage
2154 Seven Springs Blvd, Suite 103
Trinity, FL 34655
- Earlier today