Shorts Sales – Prepare to Wait…
I’ve written before how Short Sales and Foreclosures are over half of the Twin Cities Housing Market in 2009. That means, over half the homes actually being sold are owned by a bank, or approved by a bank who’s full mortgage amount is not being paid off at closing.
That’s a little scary, isn’t it?
The really frightening part is how long some of these Short Sales are taking to actually be processed and closed. I have two current offers in with short sale listings. One buyer had been waiting over 10 weeks from the date we made the offer, the other buyer has been waiting just 3 weeks.
Needless to say, that’s a loooooooong time.
Unfortunately, there’s no way to speed up the process. These banks who are approving the sale for less money than they are owed, are simply not setup for this amount of activitly. Especially in a venture that is losing the company money.
Added to that is the current economic hardships, in which people are losing their jobs. So, there’s more work for less employees. Recipe for disaster? I think so.
The other tricky thing is that most of these Lender Mediated Sales (Foreclosures and Short Sales) are lower price points, and the majority are being bough by First Time Home Owners.
Combining this new type of transaction with a brand new buyer is usually not the easiest task in the world, but there are ways to complete the transaction.
Here are some tips you should know going into a Short Sale deal:
- The is no guarantee that the sale will go through – NONE
- Be prepared to wait 3-4 months for the bank approval
- Do not put a “drop dead” date in the contract
- Ask as many questions of your Realtor before signing the offer
- Get information on the Loans from the Listing Agent if possible
- Don’t deposit Earnest Money until bank approval is given
- Don’t have your Inspection in bank approval is given
- Keep looking at other properties in case the sale doesn’t happen
There are a lot of other things you should know before getting into a Short Sale Agreement. Consult legal advice and always know your options for backing out with or without penalty before signing the offer.
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