What To Know About Short Sales If You Are a Buyer

By
Real Estate Agent with Keller Williams Chervenic Realty

So you have been looking at homes and the one you love says "short sale". A short sale means the owner owes more money to the bank than they are selling their home for. You write up an offer, make it your best offer as it takes weeks, even months to get a response from the bank. If you are the bank's first offer, you will have to wait for the bank to assign a negotiator. Then the bank will send out an appraiser and possibly ask the listing realtor to send in comparable sold homes. After all this is done the bank will consider your offer. I have a short sale listing with an offer in May and it took until August to get the approval from the bank. Be prepared to wait. If an offer has already been submitted and rejected or the buyer gave up waiting, you may be able to be approved within a month or less if you are lucky. There are some great deals to be made on a home with a short sale but be prepared to wait, wait, wait.

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Rainmaker
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Crystal De Raffele
Realty Executives - Beacon, NY
NYS Lic. Real Estate Salesperson

Great Info, straight to the point!  Also, a good note, I would advise Buyers not to apply for their loan until the bank has entered into contracts...we have run into situations, where a Buyer has paid for their application fee (which is applied to the appraisal fee, and it's not refundable); and after doing so, the bank takes too long; we are talking 5 months or longer.  In any event, if the loan allows 90 days for closing, there is an easy possibility you will go over that many days, and have to pay your bank more $$$ to extend the deadline. 

So, please be wise, don't apply for the loan too early! 

Several trying situations can arise; either the deal falls apart before signing contracts; or the bank wants the buyer to wait a longer period, which can cost them a minimum of 1% (sometimes more!), of the loan amount to extend their loan approval.  This occurs when they've applied for the loan, the appraisal has been done, and the bank starts to drag their feet.  The Buyer is responsible for more $$$ to hold the loan application on that particular house...

BUYING a Short Sale is not for the faint hearted or the light pocket...and patience is a basic minimum.  Best Wishes to all who wish to try...

Sincerely, Crystal De Raffele, Century 21

Oct 05, 2009 01:27 PM #1
Anonymous
Anonymous
Anonymous

I did a home inspection for a Client who made a purchase offer on December 23, 2008. In mid-July she lost her job. A day later, Bank of America finally -- after many delays -- approved the short sale. Ooops. Day late and a dollar short.

Oct 15, 2009 01:55 AM #2
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Susan Sawyer

Real Estate Expert - Hudson Ohio
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