A short sale does not mean a quick sale or a fast sale. The “short” part of a short sale is referring to the home owner coming up short of what is owed on the home. Usually a short sale is when a home owner is having trouble making payments and the home cannot be sold for what is still owed on the mortgage. The listing agent and the seller work together to get the bank to agree to discount the note and accept less for the house then amount on the balance of the loan. Also the home should not be below current market value. So despite the late night infomercials or Internet ads telling that you can make millions by buying short sales, if you buy a short sale house you purchased it at current market value. Of course in today's buyer's market, that current market value is a fantastic deal compared to prices just a few years ago, but a short sale will sell at current market value not below.
The only complaints that come from buyers of short sales is the length of time it takes for the owner's bank to accept the offer. The banks are completely swamped right now with all the foreclosures, refinancing, remodifactions of loans and government audits of their lending practices. So it is no surprise that it takes 2-4 weeks for them to make a decision, but if the listing agent and/or owner have not done their homework, been diligent enough or just flat out don't have clue what they are doing, it can take months. I have heard horror stories of it taking 3-4 months just hear that the bank won't accept any offer and the house doesn't even qualify for a short sale.
As a Realtor that lists and sells houses I know it is my duty to know everything I can about short sales. As a listing agent it's obvious why, but as a buyer's agent I need to know everything I can to protect my buyer's from these horror stories. I understand what it takes to have a proper short sale therefore I can ask the listing agent a few questions and determine if this is a short sale that will sell or if it will be another one that causes short sales to have a bad name.
There are a few more things you should know up front. Even if the listing agent has done everything right, a short sale will still take longer to get an accepted offer then a privately owned house or a foreclosure. If you are in any kind of a hurry to buy a house, you can still shop the short sales, but make sure that your Realtor knows about short sales and knows how to keep you safe while offering on multiple houses. There is a special way to do this and of course I only recommend you try this tactic with me. If the house is a short sale and it is at a ridiculously low price, way below current market value, it will more then likely become one of these horror stories.
If you or anyone you know could be a candidate for selling their house as a short sale you can visit my Selling a Short Sale page for sellers or just have them contact me.
