I met with a new client yesterday to view a short sale home in our area. You could tell the home owners had tried to create a great home for themselves over the years they owned the home. There were some upgrades and the home had a nice feel. There was also some delayed maintenance, the yard needed some sprucing up and the green water in the pool probably wasn’t what you picture when you think of a backyard swimming pool. All of these were things that are typical in short sale homes in the area. The price on the home was fair and all things considered it had the potential to be a great home. The biggest concern for my client was the short sale process itself.
All of her concerns were completely valid and ones I have heard before. Is the price on the home what I will really pay for the home or will the lender want more? How long will the process take? Will I lose my deposit if this transaction doesn’t work out? Will they ask me for any more money to complete the transaction? Can I get help with my closing costs from the short sale lender?
It is frustrating to me not to have good answers for her. I feel pretty lame saying “It depends.” But it really does. Some lenders will agree to closing cost assistance, some won’t. Some lenders have a process that will respond within 60-90 days, some have a process that might respond within 360 days. Some lenders pay attention to the sales prices in the area and consider the delayed maintenance issues, most don’t so the approval price can be outrageous. In short, I have no good answers.
As a buyer, if you are considering a short sale be prepared not to get all your questions answered. Be prepared to feel like you are being kept in the dark, you are. Be prepared to be frustrated, you will be. Be prepared to feel like the rest of the world is passing you by while you have to sit on the sidelines.
Recognize a short sale for what it is. It isn’t a fire sale, it isn’t a way to get a great deal, it isn’t buying a house at wholesale prices, it isn’t finding a move in ready house that is perfect. It is a way to find a home at a little less than market price. It is a way to find a home that usually needs some work but you can make a great home. It is a way to get into more home than you might have otherwise been able to afford.
Search for an agent who has experience with helping buyers purchase short sale homes. Agents who have helped sellers sell short sale homes are a wealth of knowledge but an agent who has helped buyers through short sales have more knowledge of ways to help and protect their clients. Ask lots of questions, but be prepared not to get a lot of answers. A good short sale agent will try to find ways to get you answers or at least keep trying to get you answers.