Your Perfect Home a Short Sale?
You have found the perfect home in Central Oregon, and you discover it is a short sale! One of the most common questions is…. How long will it take to buy this home? The answer is not simple; it just depends on a lot of different conditions.
What is a Short Sale?
A short sale (sometimes called a pre-foreclosure) is a home offered for sale at a price that will not pay the entire amount owed to the lender, the closing costs and so on. So, why or how can someone list the property for less than they owe? Market conditions, do not support the amount owed on the home. However there must be a hardship, the bank that is owed the money will not take a loss just because the seller has decided they don’t want to own a home that may have lost value. History shows that Real Estate trends go up and down today may be a down market – but over time this will change.
The Seller is Upside Down is NOT Reason Enough
If you owe more than you think your home is worth today that is not a good reason to short sale. If you continue to make your payments and ride the market out the day will come when your home is worth more than you owe.
The home that is on the market today as a short sale can be a great deal, if you are patient. However statistics show that only about 40% of these transactions actually close escrow. The reason is not necessarily because of the bank, but that the buyer gets impatient and wants a home they can move into in a shorter period of time.
The agent that has a home listed as a short sale will need to be in constant contact with the bank. As a buyer your agent can be as on top of things and aggressive as can be but if the seller’s agent does not know what to do or how to do it the buyer can sit and wait in frustration. More and more agents are educating themselves as to the short sale process and banks seem to be getting through the process a little quicker to.
Personally I do not think the short sale home is the perfect home for a first time home buyer. A short sale takes time, and the frustration of waiting can kill the excitement of the first time home buyer, not to mention that lending programs change rapidly and the loan you plan to use may no longer be available when you finally get the approval from the bank on the price and terms of the short sale.
So true, Thesa. I have first time buyers that have been waiting on bank approval of their offer since November 2008. Every 30 days like clockwork we are asked for another extension because there is no answer from the lender. Just today I received an email with a new list of homes they would like to see. The process is just wearing them down and they are ready to get into a place of their own.
Thesa,
I was just talking with some first time buyers about this very issue. I have a very frank conversation with buyers about whether or not they are the right temperament to purchase a short sale home.
couldn’t agree more…short sales are a total buzzkill. but most of the first time homebuyers i’ve talked to in the last year are in the market primarily because of cheap home prices, which is a direct result of the glut of inventory. a large portion of that is short sales. has that been your experience as well?