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short sale

i found a home that i am interested in buying but it is listed as short sale.i heard this was a very risky way to buy.
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May 29 2011 - Highland
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Answers (7)

As with anything, be aware of the process. Gaining knowledge is a good way of dissipating fear. Have your Realtor explain the short sale process including how back HOA dues, liens, etc. are handled if those items are a part of your transaction. Knowing what you may encounter makes the uncertainties of a short sale much easier to bear. P.S. I see this is an old question, but the information stands.
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July 14 2013
Profile picture for wetdawgs
Hi Chandra:   Have you noticed the dates for posts are in the lower left corner in grey?    Answering two years after the post appears may not add as much value as you hope.
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July 14 2013
I think it is a bit more risky than purchasing a bank owned or standard sale home. You still have the chance that the bank may not accept the seller selling the property as a short sale. Or, the bank may work out a modification with the seller to help them keep the home. There are factors that you have to be aware of when dealing with a short sale purchase. Having an agent that is staying on top of the file will be a huge help. Patience on your part is vital. If you are interested in a property, please act on it as this market is very challenging and competitive for buyers.
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July 14 2013
Patients is important,but the lack of experience could cost you the deal in the end! Make sure you have a Realtor who understands the BPO appraisal and that knowledge can assist you on how to make a good offer to remain in 1st place position to buy the property. Remember you can get knocked out of 1st place until the Bank has provided a Short Sale Approval. This is a long process, so I would recommend some credit monitoring to keep notice on your credit score/report,   [edited by Zillow moderator to remove self promotional link]
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May 29 2011
It's not inherently more risky but it is inherently more time consuming as both the homeowner and their bank have to agree to the purchase agreement. Either sides rejection can derail the sale.

Plus with short sales you can't count on the sellers providing you with closing costs or making repairs as they are already underwater.

Buying a short sale home takes longer than a traditional sale and maybe one of three short sales ever reach escrow.

If you're on a specific time schedule (your renting and you have to move by a specific date or you're kids are starting school in a new school district) I would avoid a short sale as there is no guarantee that they will close on time - if at all.
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May 29 2011
There are so many people who owe more on their homes than they're worth....because they're underwater or upside down, a short sale has become a common way to sell and buy a house. 

As a homebuyer you have to be patient because although the asking price is $150,000 and the seller has accepted your offer of $150,000, that doesn't mean their mortgage lender or servicer will accept your offer.  The seller's mortgage lender or servicer has procedures that they have to follow to determine the value of the property and to determine if the homeowner/seller is having a hardship.  If the value is not in line with what the lender has determined that the properties worth, the lender could increase the salesprice and ask you pay more for the property.  So it could be a bit risky from that standpoint if you're trying to get a steal.....by offering an unrelistic amount.  Also it could be risky because you may miss out on another property that you could close in 30 or 45 days instead of 3, 4 or 5 months.  

So with that being said, it's imperative that you work with an agent that's familiar with the short sale process and once again be patient because the risk may be worth it, if you really like the property.
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May 29 2011
A short sale is no different from a standard sale.  The only difference is that the main player in making the decision is the servicer or lender who owns the property.  The homeowner, however, signs all the contracts.  I suggest that you work with an agent who is familiar with the short sale process.
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May 29 2011
 
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