Short sales sound great, don’t they?! After all, the buyer gets their home at a bargain price, and the seller avoids foreclosure! Ideally, it would be that grand. However, a successful short sale is usually anything but that. More often than not, the process is very long, tedious and unpredictable for both buyer and seller. You may get that bargain you’ve dreamed of, but it will take hard work. The information below will help you decide if pursuing a short sale is right for you. This isn’t a description of the process – it’s a list of hurdles you may encounter during the process.
Difference Between Short Sale and Foreclosure
With a foreclosure, the bank forces the homeowner out of their home. With a short sale, the seller seeks to leave willingly. The seller hopes the bank will find it more beneficial to accept the short sale offer than spend time and money on the foreclosure process. But, there’s no guarantee this will happen.
Prepare For The Following
- The bank must do two things before they can render a decision. 1) Determine whether the seller’s situation qualifies for a short sale 2) Determine whether they will accept the buyer’s offer. These two things include many steps that take a long time.
- The process will most likely take at least 3-6 months, if not more.
- You are at the mercy of the bank. They can take as long as they want to make a decision, and no one can guarantee the outcome – not the seller, the seller’s real estate agent or the buyer’s real estate agent.
- The bank usually refuses to indicate what price they are willing to accept before an offer is placed.
- The bank is usually unwilling to accept an offer less than the current fair market value of a home. Your real estate agent can help you determine fair market value.
- If the bank rejects an offer, the entire process usually must start all over again – even if the new offer comes from the same buyer. Generally, that means at least 3-6 more months before a decision is made by the bank.
Though it’s important to be prepared for these hurdles, please note: All hope is not lost! Every once in a while, there IS a short sale that doesn’t take forever!
Have you recently bought a short sale in Hampton Roads, or are you currently seeking one? If so, what hurdles and/or ways to cope have you discovered?
