Tuesday, September 1, 2009

Short Sale Question from Trulia Reader


So in other words..... When an MSL listing is listed as a short sale for say 400,000 and you offer 400,000 that price has not been bank approved?
Why even bother looking at these listings then. It wastes my time- the realtors etc.

Dennis Olson
Both Buyer and Seller
Pendleton, OR

Dennis, You hit the nail on the head. The bank has not even been notified in many instances that the seller is trying to sell it, unless perhaps the seller is behind in their payments. The seller may not have started the process by presenting an offer to the lender that is going to pay the lender less than the seller owes - that is what makes it a "Short Sale". Then the long process starts to get the low offer accepted by the lender rather than the lender spending much more to take the property through the foreclosure process. Short sales I have listed last year took 8 months. This year my shortest one is 2.5 months but most are still 3-6 months.... AND you never know for sure that you are in contract until the bank decides to give you that agreement letter.

Sometimes you need to look at the comparable sales in the area as sellers/agents will list the house really low to get a bidding war going.

What we are finding is that the homes in this price range in California's Santa Clara Valley at least are drawing in the all cash buyers and they are buying them as investments so they do not have the same angst in waiting for approval since it is a business deal and not their new residence.

If you want a home and want it within a reasonable amount of time, yes, stay away from short sales. We, as REALTORS, will appreciate that too - but hey, everyone needs to be helped and that is why we do it also. All joking aside, you just really need to KNOW all the upsides and downsides and be willing to wait if you want to buy a "Short Sale".

Dawn O'Neal
Realty World Executive Advantage

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