Buying a Short Sale
Let's start with what a short sale is. It happens when the owner can no longer afford their property and they owe more than the property is currently worth. The mortgage holder will have to take less money than what is owed on the loan for the property (that is where the short comes from)
When buying a short sale you need to know a couple of things. Yes, you can get a pretty good deal. The buying process takes a bit longer than a normal standard sale. The loan holder has to figure out how much the property is worth in the current market and how much money they are willing to lose from the loan that they hold on the property. If there is more than one loan holder involved, it can take longer because they have to coordinate the amounts they are willing to lose. This part of the process can take a month on its own before the rest of the buying process can even start. Sometimes the loan holders can't agree and the short sale falls through and the buyer has to walk away
If the loan holders can agree then the normal sale process starts with the buyer having the opportunity to make their inspections and starting their loan process. Please note that most sellers in a short sale will not agree to fix anything as they are already loosing money and some do wind up asking the buyer for more money at the end of the process to help with some of the shortages on cost for the process. These shortages are less of a problem as lender's have made improvements to the short sale process and it doesn't happen as often anymore
This type of sale can take 2-4 months from start to finish. Some lenders are streamlining their process. If you offer the price that has been already agreed upon (in an already approved short sale) it takes less time. If you offer less than the already approved price, the whole process will have to start over or they will just deny or counter you offer. Your offer will be denied if you have a contingency to sell your current home unless your current home is in escrow. Then they may just wait to see that your current sale closes before accepting your buying offer
Short sales can be a good deal if you have the patience and knowledge of what you are getting into.
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