Good Deals?

Lots of foreclosures, lots of short sales. By the way, what is a short sale? Well, it isn’t short! In September of 2010, some buyers I was working with wrote an offer on a property listed as a short sale. After waiting for nine weeks for an agreement from the homeowner’s lender regarding the offer, the buyers moved on to another property which is also a short sale. Another wait of eleven weeks, buyers cancel the contract and we move on to a property that is actually purchase-able. Want the definition of a short sale?

Here it is according to Wikipedia: A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

The process is as follows: Seller lists the property with a Realtor® at a price that is not sufficient to pay for closing costs and mortgage payoff. Buyer writes an offer and in the contract the verbiage “subject to lender approval” must be included. Seller and buyer agree on the terms of the contract and the contract is shipped to the mortgage holder for their approval. Then we wait…….and wait…….and wait! Now, there are times when the approval may come inside two to four weeks, but that is not the norm. Some of the problems occur because the seller’s Realtor® doesn’t know how to complete a short sale and dealing with the seller’s mortgage company is key. Even if the Realtor® is versed in completing short sale transactions, there are no guarantees. Patience, my friend, chill! I don’t know whether to say, “Buyer Beware” or when choosing a Realtor® to complete your short sale, maybe I should say, “Seller Beware”!

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