Short Sale Buyer Advisory
Are you looking for a new home? During your search for your new home you and your agent may view some properties that are offered as a “Short Sale”. These are properties that typically have loan balances in excess of the asking price. I feel it is important for you to understand the challenges in pursuing short sale properties. Short sale properties do not follow a traditional purchase process. Although the contract is similar, the time frame and approval process actually vary significantly from a traditional transaction. Every bank has a different set of rules and priorities, as well as contractual requirements.
With this in mind, it is important to know that pursuing a short sale purchase is a lengthy process that requires patience and perseverance, which you should understand may not be rewarded in the end. It is not uncommon for the process to take months. The seller’s motivation is to accept an offer and submit it to the bank in an effort to sell the home and be relieved from further financial obligation. The bank, in contrast to an ordinary seller, has no emotional attachment to the transaction. In fact, many banks merely weigh the benefits of carrying the property versus taking the loss on their balance sheet today.
Sellers of short sale properties are often, understandably, under stress. As a buyer you should be aware that, even if their lender has approved a short sale under terms and conditions favorable to you, a seller may decide to file bankruptcy or attempt to cancel the sale at any time. This may result in you having paid inspection, appraisal and other fees for which you may not be reimbursed or may have no recourse for reimbursement. You are advised that your agent has no control over the actions of the seller and has no obligation to reimburse you for your expenses.
(The above is a message from Jeff Hayes, Managing Broker,Coldwell Banker Encinitas)