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.