Sep. 19, 2009 - What You Need To Know About Short Sales

While this information can go for any market in the US if you want to know about Las Vegas see http://comehometolasvegas.com  and if you want to know about Summerlin Real Estate see http://realsummerlin.com

If you are considering making an offer on a pre-foreclosure, short sale home. Keep in mind very few can close in 30days or less.

Home buyers wait could be 4 to 6 months to close on a short sale, sometimes longer. I have had clients that have waited as long as a year. This is great if you have no need to move quickly.

A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.

If there are two loans, this could be a real problem. The seller will have to get permission from both lenders. The second very often loses out all around and may not agree unless the first lender offers something to them.

A lender is unlikely to agree to a short sale unless the seller has no equity and is unable to repay the difference between your sales price and the existing loans.

A lender will not even look at a short sale until there is an offer made on the property. If the home is close to going into default and there are two different departments working on the same property, one might not know what the other is doing. Be sure that your agent checks to make sure everyone is on the same page. I know of one transaction where the short sale was approved but the home still went on the auction block because there was no communication between departments.

Make your offer contingent upon the lender's acceptance. Give the lender a time frame in which to respond, after which, you will be free to cancel. The lender and the selling agent need to be under some pressure to make sure your offer is in the right hands. The hands of someone who can make a decision. Some lenders have to submit to a committee but most can make a decision within two to three weeks and either accept or send a counter offer.

Some short sales are priced ridiculously low. This is partly done to get some offers and the short sale process started. They are usually so low that the lender will NEVER accept them. If this is the home you really want, to get your offer accepted, it will need to be priced near market value. If you're not prepared to pay above a superficial price on a lowball listing then walk away now and save yourself time and frustration.