They've been a predominant player in our market for at least the last 3-5 years. The term has become part of our national vocabulary and with real estate still at the forefront of our news, the term Short Sale is just as hot if not on fire! With more and more homeowners facing foreclosure and with real estate markets taking a hit, Short Sale properties dot the real estate landscape, attracting buyers with greatly reduced pricing. We've evolved with them, learned more from them, and thus the reason for this note about what to beware of.
- Short Sales will still take a LONG time to be processed. On average 90-120 days.
The time frame stated on a Short Sale addendum ( the time that the bank is given to respond on a offer) really means nothing to the bank.
- Be wary of the term " approved short sale price". Sometimes this is a ploy to lure buyers in with a reduced price on a property when in fact the bank will counter your offer and try to negotiate with you.
- There may be other liens and judgements against the said property. Keep in mind that if the sellers have been unable to meet their mortgage payments, they are most likely in default on other payments as well, i.e. credit cards, HOA dues,taxes, etc. This means that these judgements against the property will have to be negotiated as well. In some instances, the bank/lienholder will ask the buyer to cover these liens at a negotiated price. It's an emotional dilemma: you want the house but at what price?
- The bank/s still can and will accept other offers. The process may vary from state to state, but here in WA the banks have to give the buyer in 1st position written notice that they are accepting another offer.
- The home may be in great need of repair or clean up, which will come out of the buyer's pocket.
- These homes are usually sold " As Is", so the lienholder will not negotiate if there is a defect in the property. It is still recommended that a home inspection is performed prior to purchasing for the buyer's own knowledge. Remember Buyer Beware!
- When the bank has accepted/approved an offer, they should give this approval in writing. Here in WA state, we use a form called 90SS which states that the seller has received written acceptance from their lienholder. As with all contracts, you want everything in writing.
- Good communication between all agents and parties will help to ease the anxiety of the wait and process.
- Last, but definitely not least, PATIENCE is still a key factor. Short Sales are arduous even for the savviest of buyers.