Short sales, What are they? and should i try and purchase one?
Short Sales are not short when talking about the time it takes to purchase one. So why call them short sales? Tfhe owner is trying to sell the house short of the funds needed to pay off the mortgage that they have on home.
Most short sales hit the market with out the banks/lenders approval on the price, because they want an agreed upon price between the seller and a buyer in a contract first. This is why short sales can take so long to close on, and can be so frustrating to try and buy. You and the seller agree on a price and then it goes to the bank/lender and they have to approve of the price as well, which can take months. Some times the bank comes back with a higher price than the agreed upon price with the seller. If the buyer wants the house they have to pay the approved price.
Negotiations for repairs in a short sale can be tricky as well. The seller is selling because they have no money to pay the mortgage, so do you think they have the in pocket funds to fix things you find wrong with the home? Usually not. The bank usually won't play ball unless it is required by the buyers lender to receive the financing to purchase the home either. They bank is about the final dollar. They figure out what it is going to cost them to foreclose on the home compared to what they will lose with the short sale.
So i tell clients to go after short sales after we have looked at all the available homes on the market that fit their wants and needs, and if they can't find one to start looking at short sales. If you are having to wait around for a home to come on the market you might as well get the ball rolling on the short sale if it meets you criteria. The beautiful thing is that while you are waiting, who knows how long, for the lenders approved price you can continue to look at other homes as they come on the market. You don't have to put any money down for inspections, appraisals, or even the earnest money until you get the approval notification. If you haven't found house by the time the approval comes, you push forward with the short sale and work the deal like any other home purchase.