SHORT SALES NOT GOOD FOR EVERY BUYER
March 24th, 2012
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When looking at pictures of short sale properties on the website, most of them look real nice for the asking price. The truth is that most of them could end up being a good deal for a buyer, if the other conditions of the transaction can also be satisfied.
The main obstacle is time. To get a short sale closed it may take up to 7 months (I know because I saw it happen). Most buyers will get pre-approved, go out looking for a house, and wish to move in no later than 2 months later. Some buyers feel they can wait, submit an offer, get into a contract, and then start to get frustrated when weeks go by and there is no communication from the seller’s lien-holder.
The second issue about purchasing a short sale is that it is mainly an as-is transaction because the sellers are not in a financial situation where they can do any repairs, and they are not going to receive a penny from the sale (no matter how much money they put into fixing it). If the buyer happens to have an FHA loan, and the FHA appraiser feels that specific repairs need to be completed to authorize the sale, the transaction is most likely going to bust. An investor, who doesn’t really care if he/she buys this property or the next, can sit and wait for the slow process to either be completed or terminate due to a foreclosure. They will never be getting an FHA loan, and have extra money to do the required repairs.
There are many more considerations to a short sale transaction, and an experienced Realtor will definitely be a good guide for a buyer.
If you want to learn more about short sales, check what the sellers have to go through in order to try to qualify to do a short sale: http://homeloanhelp.bankofamerica.com/en/short-sale.html?cm_mmc=Cre-ForeclosureAlternative-_-Google-PS-_-Short%20Sale-_-HT%20Short%20Sale
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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®
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