Short Sale buyers can become very frustrated with the whole process and will often walk away before the deal closes or is even approved.
Buyers need to be commitment to buy a short sale and see it through to the end. Here are some interesting numbers of short sales sold the past few years in Bellingham.
50 out of 924 homes sold this year so far for 5.4%
81 out of 947 in 2012 for 8.6%
57 out of 805 in 2011 for 7.1%
61 out of 790 in 2010 for 7.7%
35 out of 912 in 2009 for 1.7%
Which way will the numbers go next year? Some say down as the market is improving, others are predicting a rise in short sales again.
Banks still favor the short sale as a solution to non-performing loans.
Most of the frustration that short sale buyers have is was over situations and delays that they should have been warned to expect.
- Once the lender receives the short sale packet, they may require at 40-60 business days or more to approve the sale. After approval, the sale must close within lender approved time frame, usually 30 days. It is not uncommon to receive no updates, contact, or communication at any time from the lender. (I will always contact the listing agents for weekly updates.) Most likely short sale process will take at least four months from the date of contract, and during which you won’t have many updates. If you are bothered by this lack of contact and knowing what is going on don’t look at short sales.
- No cash from this transaction will go to the seller. There are a few exceptions such as a HAFA short sale and some Bank of America programs..
- The seller will bring no cash to closing so they will not pay for any closing costs.
- The seller will usually not be able to pay for maintaining the property. The property will remain in the current condition through closing and the seller will not make any repairs to the property.
- The buyer should have a professional home inspection for their own knowledge, the seller will not agree to any requested repairs. Listing agent will want you to have the inspection done before bank approval, to show you are serious and have some “skin in the game.” As a buyers agent I would only recommend doing this if you are very committed to the home and willing to do what it takes to get it. An important thing to note is many buyer’s’ lenders will require certain repairs as a condition of the loan. The buyer needs to understand that these additional costs will be the buyer’s should they proceed to closing.
- Every short sale is unique. Every transaction will be assigned to a loss mitigation specialist, or negotiator who will make decisions based upon the current needs and goals of the investor that hold the note.
There is an unknown waiting period that you must be able to deal with in order to take advantage of the savings you may receive when you buy a short sale.
There is potential for additional cost of repairs or improvements that might not be seen on a cursory tour of the house. The seller is not going to pay for problems that you find when you buy a short sale. Either you will pay for the repairs, or you will need to walk away and begin the process all over with another home.
Most people who chose to buy a short sale are very happy as long as they know what they are getting into. If you stick with it through closing you can get a great deal and have a great home for you and your family to enjoy for a long time.