Some of the most widely used terms in the real estate industry today are “short sale”, “bank-owned”, “REO” and “foreclosures”.
The main difference between these types of homes is not necessarily that one is a “better deal” than the other but rather the processing time involved from the time a buyer submits an offer, to the time of acceptance from the lender, to the actual closing of the property.
Of these terms, “short sale” has become the “bad seed” if you will, in these real estate economic times. A short sale is defined as a home who’s market value, based on comparable sales in the immediate neighborhood, is less than what the seller owes the lender after all closing costs, etc are deducted from what the buyer is willing to pay for the home. When this happens the seller has to get permission or approval from the lender to sell the home for less than what is owed.
Once a buyer makes an offer on a “short sale”, the problem has really been that the lenders are taking too long to let the buyer know if they have accepted or rejected their offer. This time frame for the lenders to negotiate these offers can take anywhere from 2 weeks to 4 months. And in some cases it’s even taken longer.
This time frame in most cases is unacceptable to the buyer. When the agent working for the buyer explains this process, most buyers lose interest, get frustrated and lose hope of buying their dream home.
There are ways to shorten this process and requires the cooperation of all parties involved. First of all, the agent that lists the home for sale has several requirements and documents that have to be completed and sent to the lender. If any of these documents are incomplete this slows the process to a halt. Secondly, the agent representing the buyer has to know what questions to ask specifically to the seller’s agent before writing the offer, which really helps determine and give the buyer an idea of a “guesstimate” of how long it will take the lender to approve or reject the offer.
When you’re being represented by a professional realtor, either as a buyer or seller, be sure the agent is extremely knowledgeable of the tasks at hand.
The Positive Side of Buying a "Short Sale" Property
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