There are many unique characteristics of short sales that make them both challenging and attractive for buyers.  Before you make an offer on a short sale listing, here are a few things you should know. 

  • Some Homes Advertised as Short Sales Aren’t – There are many inexperienced agents listing homes as potential short sales that have no chance of closing.  It’s important to have your buyer’s agent qualify the other agent to make sure they’ve done their research and prepared a listing that has a good chance of closing rather than going into foreclosure.
  • Sellers Typically Won’t Make Repairs – Sellers are typically in a position to short sell their home specifically because of a financial hardship.  They normally do not have money to make repairs, and lenders won’t usually do so unless damage to the home is so great that it would prevent the home from selling otherwise.  Such conditions might include roof or structural damage.  In most cases, however, you must be willing to purchase a short sale home “as is.”
  • Lenders Must Net a Certain Amount – Many buyers hold the mistaken belief that lenders will accept offers far below market value just to sell a home.  True, you may get a good deal on short sales, but lenders must still net a certain amount after paying all costs, or it wouldn’t make financial sense for them to agree to the sale.  Depending on whether the loan was FHA, VA, or conventional, which lender holds the loan, and whether there are additional liens on the property, you may only find a lender willing to accept a few percent below market value.  
  • Purchasing a short sale is a waiting game - You will submit an offer on a short sale just as you would a traditional sale, but it may take weeks or even months for the bank to respond, and then even more time before they agree to approve the sale and close.  While you may close sooner or later, it’s normal for the process to take three to five months. 

Have questions about short sales? Contact Sara Abbas at (512) 522-4990 today.