Should I Buy A Short Sale Property?
Q: What is a Short Sale?
Q: A sale where a mortgage company or companies agree to accept less than the full balance of the loan. This can occur because a homeowner cannot sell their home at current market value and pay the lender the full amount of money owed on the mortgage.
Q: I've heard it takes forever to get the bank's approval. Why would I want to be tied up with a property for months and not know if I'm going to be able to buy it?
A: Short sales have been described as the 'brain surgery' of real estate. Not all Realtors® understand how to qualify the seller for a short sale transaction or how to compile the extensive financial package required. The typical approval rate for short sales is only 10 to 12% nationwide. Our team has been extensively trained and certified as Certified Distressed Property Experts (CDPE's). We chose this extensive training and certification because Realtors® with the CDPE designation average an 82% success ratio with short sales.
Q: How long does it take to do a short sale?
A: It can take 60 to 90 days from the day the purchase contract is written until closing. However, since we do all the financial paperwork with the seller before we list the property and begin the approval process with the bank right away, we have been experiencing approvals in less than 30 days. The bank may require you to close in as little as two weeks after they approve the short sale.
Q: How long does it take to do a short sale?
A: It can take 60 to 90 days from the day the purchase contract is written until closing. However, since we do all the financial paperwork with the seller before we list the property and begin the approval process with the bank right away, we have been experiencing approvals in less than 30 days. The bank may require you to close in as little as two weeks after they approve the short sale.
Q: Is there an advantage for me to buy a short sale rather than a foreclosure property?
A: Bank owned or foreclosure homes may have extensive deferred maintenance. A Home that is occupied by a homeowner may be in better condition than a bank owned property that has been vacant or abandoned for months.
Q: Why exactly would a bank agree to a short sale?
A: It is much more cost effective for a bank to do a short sale rather than foreclose on a home. Banks make their money from receiving monthly mortgage payments. While banks will take a loss during a short sale, they can often minimize their loss by as much as 10 - 20% over a foreclosure.
