We have talked about Central Oregon short sales, and many of the differences for a buyer of a short sale compared to a traditional sale. However, with all things in real estate, especially over the last couple years, things change. I thought it might be a good time to go back over a few of the things a buyer should be aware of when it comes to buying a short sale.
A short sale on the buyer’s end should be thought of as a traditional sale, you have a buyer that is wanting to purchase a home, a seller wanting to sell a home. The only difference at this stage is that the seller can not sell the home at the sales price without the bank’s approval.
Bank approvals do seem to be coming a little more quickly than a year or two ago, but you will still hear grumblings of the bank taking too long and buyers walking. When this happens it is the perfect time to slip into place as a buyer.
A short sale as we have discussed takes bank approval. When a buyer submits an offer the seller must first accept the offer, then the listing agent and the seller will prepare the offer and the seller’s personal information to be submitted to the bank. If a buyer withdraws their offer during this process and you the new buyer submit a new offer, you can often times cut the bank’s response time down, because the previous buyer has already done most of the waiting.
Most of the time a short sale offer can be written so that none of your time lines begin until the bank has approved your offer. What does this mean to you, the buyer? It means that none of the standard inspections, appraisals and so on will be started until the bank approves your offer. Which in turn means you do not spend any money on the chance of being accepted. Once the bank approves your offer, then your home inspection, appraisal and so on is started and then and only then do you incur the costs associated with purchasing a home.
When the bank approves your transaction, it is time to kick things into high gear. Often times the bank approval will require a shorter closing period than you might expect. It is important if you are purchasing your home with a loan that you have your lender in line with your needs. You should get your loan application in, and keep your lender informed of where the process is, so that when the bank approval comes in your lender is completely ready to move forward with you.
Buying a short sale in today’s market is not nearly as scary as it was a couple of years ago. But they are still complex, they still take patience and they most of all require that everyone be prepared to jump into action when the time is right.
This post is a perfect reminder of what just happened to my buyers. We were the fifth buyers on a beautiful near-new semi-custom built contemporary. (the first four buyers walked or had other problems obtaining financing) and therefore not only were we able to extract a great price, the bank also gave in to demands by the listing agent to promise not to take more than 3 months to approve the short sale (that may not seem very fast but we are talking B of A here, my friend!). We are closing on 6/30 and if all goes well, my buyers will be one of the lucky few to still be able to collect the $6,500 tax credit for move-up buyers. Timing is everything when it comes to short sales!
Thank you for your comment and I hope you can get closed to give your buyers the move-up credit. There are some great homes at great prices, short sale, bank owned and traditional sales… thanks again for the visit and the comment.
Thesa-
Thanks for posting this. Its a great reminder for folks that fees associated with buying a home do not start until bank approval on a short sale situation.
Thanks for the good info.
Sincerly,
Kyle Hoak
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