Profile picture for RANDBNLV

How do short sales work?

I want to know if I should even bother or is this just a waste of time. By that I mean, is it a big bank takes little banks situation?
  • July 23 2010 - Rosedale
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Answers (8)

It is not a waste of time if you really want the home.  Each short sale is a little different and the agent who has listed the property should know what is required of the bank in order to get the short sale approved.  Some banks have a streamlined process for short sales in place and can close in a as little as 30 days.  While others may take 6 months.  Remember that just because you see a property listed with a super cheap price, that doesn't mean the bank will honor that price. 

Listing agents have a responsibility to list a home at market value based on comparable sales in the last 90-120 days.  The bank will do their own independant appraisal and a broker's price opinion or BPO to determine value and the price they are willing to accept for the property.
  • July 24 2010
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Profile picture for Pacita Dimacali
Let's set expectations:

Generally, short sales could be a very good deal or value for the buyer because these properties can be sold close to or even at market value.  Just because it's a distressed sale doesn't mean they're giving it away.

Doing a short sale may be more beneficial to the property owner than if the property is foreclosed through strategic default, deed in lieu of foreclosure, or the owner files for bankrupcty. "Beneficial" in this case applies toshort sale having a less drastic and damaging effect on the seller's credit score.


If you're an agent,  become well-versed and experienced in listing/sellling short sales because that wave will keep coming for a while. Look into being a CDPE (Certified Distressed Property Expert) or visit Short Sale Superstars

If you're a buyer, it really depends on a lot of factors. If you're in a hurry to buy to meet a deadline, then don't count on short sales because they're anything but. The only things short with short sales are tempers (not unless the short sale lender is Wachovia who is the best in working with this type of sales). Be prepared to wati 3-6 months. The property owner doesn't make the final decision: the short sale lenders do. As such, even if the owner accepts your offer, it will be up to the short sale lenders to approve/accept/reject/counter the offer, the price, the terms and conditions.  In short sales, there are NO GUARANTEES.

If you're a seller, and you're just starting out, here's a  Short Sale: Primer for sellers. Setting the groundwork and expectations.

Good luck!
  • July 24 2010
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I have helped many buyers close short sales.  It seems to be worth it in the end but the waiting can wear on you.  Be prepared to wait many months for an answer and then more to close. . .good luck, there are many deals out there!
  • July 23 2010
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All about short sales, foreclosures - distressed properties.

The best deals are often distressed sales, for obvious reasons. Bother is the usual cost for steal deals. Wasting time is what you do when efforts come to nothing, like a failed attack by a predator.

Work hand in glove with your agent to locate, explain and consider all best value opportunities. Distressed properties dominate the market so serious sellers not in trouble must price to compete.















  • July 23 2010
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I think this depends on if you are the seller(homeowner) or the buyer.  If you are the seller this may be an alternative to a full blown foreclosure sale.  As well if you are in a deficient state the bank can come after you for the balance of the mortgage lost even after the foreclosure sale.  Most previous owners find themselves owing the bank quite a bit of cash after the property has foreclosed.  As well during the shortsale process the bank may decide to work with you to execute the shortsale which would give you a few months to save cash and move out the property.  I believe for the seller this is a win-win all the way.

If you are the buyer this is also a win-win.  Its a great opportunity to purchase a property at discount.  Presently I am working with a client whom is purchasing a property at short sale for $499k.  It was purchased in 2005 for $680k and was listed 1 year ago at $850k.  The neighborhood has seen a 25% decrease in value and the bank is considering the short sale.  This property may not be successful but if it is the buyer gets a great property at a great price and the seller is not left holding the debt.

Also, I must emphasize that investors has deployed and used the short sale process for years before it became so widely known and accepted by the real estate community.  Its a great process tool for a poerson with patience.   I strongly believe in it.
  • July 23 2010
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Profile picture for ABBAUSA
Short Sales are mis-named, should be Slow Long Sales, Maybe.

If you have a found a home, in an area that you like, and have the time (90days +/-) I believe it is worth pursuing. All REO and REO like property are a risk and a purchase is not a sure thing, but the gain can be worth the effort.

Secure a Realtor© with Short Sale Experience and go for it!

Good Luck!

James Callas - Realtor®
  • July 23 2010
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From a first time buyers perspective, I wouldnt waste your time with short sales.  Usually there are standard sales or REOs in your market place that are a much more viable option. As an agent, I dont show short sales to first time buyers because there are so many factors involved that get in the way of that buyer actually getting that particular home.
 
From an investors perspective,  with 25%+ down payment or all cash, I would look at this option. Typically you are not in a rush and can wait 2 months+ for a decision on a lien holder(s). 

Currently I working about 8 short sales and have been working them for the last 3 years.  The process for approval has been cut down over the years, yet a first time buyer today can get quite frustrated with the whole process and dont recommend it.
 

  • July 23 2010
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There are no guarantees when working with short sales, but it is worth trying versus letting your home go into foreclosure. There are many agents that have successfully closed many short sales and yours may be one of them.
  • July 23 2010
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