what is the biggest downside buying on a short sale?

Asked by Brenda, New Albany, IN Sun Sep 13, 2009

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Patrick Thies’ answer
Patrick Thies, Agent, Anytown, IL
Sun Sep 13, 2009
Keep this in mind when buying a short sale. You can get a great deal on a home, but short sales need to be approved by the lender.
You negotiate a deal with the seller and then it goes to the lender to see if they will take less than what is owed on the loan. This could take 3 to 6 months to get an answer back and close. You have to be patient it will depend on how backed up the lender is.
Also, depending on the lender, there may be back taxes owed and the buyer may have to pay those, there may be a second loan and the buyer would have to pay something on that to satisfy that lender, you will probably have to pay for any required inspections, may even have to pay for closing costs, surveys and title charges. All short sales are different, this is just something to be aware of.
The other thing is that just because it's a short sale doesn't mean the bank will approve it. It could get denied by the bank and then you will have to start all over.
1 vote
David Karst, , South Bend, IN
Tue Sep 15, 2009
Waiting for weeks, and possibly months for a response from the lender agreeing to the short sale. Many months in some cases.
0 votes
The Hagley G…, Agent, Pleasanton, CA
Sun Sep 13, 2009
The time it takes for approval and closing escrow. HOWEVER...if you are patient you can get a great deal.
Web Reference:  http://shortsalesheep.com
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