Hello Again!

One hot button topic in the Hilton Head Island real estate market today is "short-sales".  Buyers and agents are both beginning to ask, "Just what part of this sale is short!"  I know this is the monetary position of the bank, but come on! 

The feeling is that the lender just doesn't care whether they close the sale or not.  After all, they are the ones losing money on the deal.  But this is usually not the case.  Often the lending institution is overwhelmed by the sheer numbers of short sales they have to process.  Remember, most of these lenders are national lenders and you will be dealing with their representatives from all over the country and sometimes out of the country.  They are dealing with sales all over the country and it is not up to one person to okay the sale.  We all know what happens when anything is left up to a committee vote!

We are fortunate on the island of Hilton Head not to have a lot of short sales.  They are here but they are not for the faint of heart.  Many times it is ten to twelve weeks after an offer has been submitted before you hear from the lender.  And, unfortunately, what you often hear is the lender does not have an answer for you and will need another four to six weeks.  Keep in mind, this is if all the buyers paperwork is in order and they have dotted every "I" and crossed every "T"! 

I do not discourage anyone from purchasing (or trying to purchase!) a short sale.  I do recommend that they have a great deal of patience and understand that they stand a very good chance of not getting the property they want.  Remember, if the property is a really good deal, there will be multiple offers.  Only one of these offers will be accepted.  Also, have a plan "B".  Continue to consider other properties that may be in the same area or development and close to the same price.  Try to include an "opt-out" clause in your offer.  That is, let the lender know that that should you find another property, you will withdraw your offer.  This can be complicated as many short sales require a substantial ernest money deposit and it can be time consuming to get it back.  Also, it may be rejected outright as the lender has their own paperwork that is submitted and any deviation from that paperwork will cause it to be returned to the selling agent.  But, you can try!

This brings up another negative of short sales.  The ernest money required to submit an offer is often a minimum of three percent.  Prospective buyers need to know those funds  will be tied up until the lender makes a decision.  This can keep someone from making an offer on another property, depending on their liquidity and cash flow.

There is a silver lining in this, however.  Many sellers are getting smart and lowering, if they are able, their list price to close to what the short-sale is asking.  The question for a buyer then becomes, "Do I want to take a chance on a short sale or purchase a comparable property for close to the same price in a fraction of the time?"

This is a great time for buyers interested in Hilton Head Island.  People who thought island life was out of their price range are finding they can purchase on the island.  Investors are picking up some great properties and it is a great time for purchasing that vacation or second home.  Don't wait until prices are on the upswing again.  Few things are sadder than "I wish I had..."