Looking for short sale listings? Please visit my Short Sale listings page.
If you are considering buying a short sale property and want to learn what is involved, I hope
the answers to these frequently asked questions will be of assistance. Constant
communication between me as your real estate representative, the listing agent, and the
lender, is the key to a successful short sale transaction.
You can register for automatic updates from our MLS for short sales that meet your needs on
my Home Search page.
A short sale occurs when a property sells for a price that is insufficient to pay back the loan or
other liens against the property. The seller must prove financial hardship to their lender.
The seller's lender will not allow the seller to receive any proceeds or obtain any monetary
benefit as part of a short sale. They also will not allow the seller to make any repairs. A short
sale is usually as-is, subject to a home inspection by the buyer.
Changes in the market since I first published this page now favor foreclosures over short
Banks have a direct financial interest in maintaining their inventory of foreclosure properties.
Many foreclosure properties for sale have new flooring and fresh paint, sometimes with new
appliances and roofs.
Owners of short sale properties are in some kind of financial distress and have no interest or
ability to maintain their property in top condition. There is also a good possibility that there are
unpaid homeowner/condo association fees, liens on the property, or unpaid utilites. Most of
the time, the bank will ask the purchaser to pay for these items in order to convey clear title to
a new buyer. Since the short sale price a bank will accept is usually based on a recent
appraisal, you may actually end up paying above market value if unpaid items are factored in.
Despite a recent federal law requiring banks to respond to offers on short sale properties
within 30 days, a short sale can often take up to 90 or 120 days to close.
During that time, a short sale property runs a risk of further deterioriation from owner neglect.
Closing/title companies and real estate attorneys have created an industry negotiating with
banks to get a quicker resolution on accepting short sale offers. They market their services
representing the seller's best interest to the lender. Some of these negotiators are better than
others. Hopefully, this industry will vanish as the new short sale rules take effect. These
"negotiators" are loosely regulated and add an unneeded layer to the entire process.
Some short sale negotiators, hired by the seller, ask that you as a buyer pay them a fee for
their service. I strongly recommend against this. The seller hired them, the seller should
pay them. However, as a buyer you do benefit from the seller's lender offering to pay some of
your closing costs, such as owner's title insurance and title search fee.
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