Below please read my disclosure about short sales….
Please be advised that as a buyer in this market at this time, a Traditional sale is most favorable for a buyer to pursue a TRADITIONAL SALE vs a SHORT SALE. With a short sale, we have the owner whom will accept an offer, which is subject to the lender’s/bank/lien holder approval. The lender/bank/lien holder may respond with accept, reject, or counter the offer. This response may take several months. Therefore a buyer’s earnest money deposit may remain dormant in escrow for quite a long period resulting with buyer frustration.
A buyer’s best position/approach is to target a Traditional Sale, not a short sale.
Below please find additional short sale disclosures:
~Buyer is informed that the lender/bank/lien holder may take as long as 90-180 days to respond to the request for a short sale and may still not give an approval.
~Buyer is informed that the rate lock of buyer loan may expire during this period.
~Buyer is informed that the short sale subject property may be foreclosed during this period. If the property forecloses, then the short sale is terminated.
~The Seller may negotiate a Loan Modification with bank, whereas bank may approve Loan Modification vs short sale for solution for seller’s hardship. If seller does a Loan Modification, then the short sale is cancelled.
~The Seller may cancel the deal if the Seller does not receive a FULL WAIVER OF SHORT SALE DEFICIENCY from the lien holder.
~Seller must submit a specific and complete short sale package to have his request reviewed. Each bank has a very specific process for making short sale decisions. If the short sale package is not complete or is done correctly, your offer will never make it through the short sale process or may have lengthy delays.
~Buyer is informed that there have been cases whereas seller was not available to close.
~Buyer is informed that a low percentage [between up to 30%-33%] of short sale deals actually successfully close.
~Buyer is informed that the lender does not own the property. The terms of the purchase contract are agreed upon between the seller and buyer. The lender’s/bank/lien holder approval of a short sale is a contingency. Escrow may be opened within 24 hours of acceptance by of the purchase agreement, not when the lender’s approval of the short sale is received.
~Many short sales are not well maintained homes by virtue that the seller does not have money. Pride of Ownership may be compromised by short sale seller.
~Short sales may require the buyer to pay Law Offices, a third party processor; buyer is to pay $1,500 as a processing fee.
~Short sales usually sell at Fair Market Value. [Short sale may not be the perceived “Screaming Deal”]
~Short sales do not have the intrinsic value of certainty.
I recommend all of my buying clients to choose Traditional Sales vs short sales.