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Old 04-28-2012, 03:30 PM
 
103 posts, read 258,746 times
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There are quite a number of short sale homes in the area and I was just wondering if any of you realtors out there have any knowledge of what the typical wait time to hear back would be and if you advise buyers against these types of sales. I feel as though my realtor is not interested in following up on short sales because of the amount of work involved. Any insight would be appreciated
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Old 04-28-2012, 04:46 PM
 
50 posts, read 116,978 times
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I hate short sales.... they can take as long as the bank and any lien holder feels like.

Im involved in one, been waiting for 3 months. My offer got approved, listing agent called my agent and sent us the HUD statement. I booked a home inspection 5 days later, and after the inspection the bank called the listing agent to notify that one of the lien holders changed his mind and the deal was not going through.
Another short sale I'm involved with is with BoA, and its been over a month only, so I dont even bother checking the status now.

Did I mention that I hate short sales?

I heard of people that waited 10 months to close a short sale.
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Old 04-28-2012, 05:57 PM
 
Location: Lakewood Ranch, FL
5,636 posts, read 9,002,406 times
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I'm not a big fan, if that's what you mean. It is impossible to predict how long a short sale will take. It depends on a lot of different things. You have the lender's opinion as to whether a short sale is justified, you have the seller's willingness to accept the lender's terms, different lenders are faster than others, some lenders are really just servicers and they have to get the investors to approve the sale, Broker Price Opinions (BPOs) can be stupidly wrong, investors can insist on a higher price than is truly justified, etc. And, that is just the homes with one mortgage. If there are other mortgages, it can be much worse and even impossible. However, many short sales do go thru so they can't and shouldn't be just written off. They are not for every buyer. If you need a place within a certain time frame, you should look elsewhere, IMHO. If you are not willing to give it all the time it takes to see it thru, and be willing to accept the possibility that it won't happen, don't waste everyone's time. Some are smooth as silk and some are really frustrating.
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Old 04-28-2012, 05:57 PM
 
Location: Sarasota FL
6,864 posts, read 10,101,622 times
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I saw a listing in a villa community that I have interest. Listing stated that it was a short sale and people making an offer would get a discision in 2 weeks. Did some investigating to find that the owners bought the unit 10 years ago for $133,000 but the asking price was $150,000 [actual amount owed unknown] I assumed there was a second mortgage [equity loan] plus the owner was conducting his business out of the address [business involved in mortgage?]. I didn't want to get involved.
Listing was on line for a month and disappeared. I assumed a sale was made. Listing reappeared 4 months later with same RE firm and mls# and disappeared again 2 weeks later.
Lenders are not going to get what is owed on these properties. Why don't they just bite the bullet and take the loss?
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Old 04-28-2012, 06:31 PM
 
Location: Port Charlotte, FL
3,979 posts, read 9,088,750 times
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I list and sell short sale homes. I don't discourage buyers from putting an offer on a short sale, I just inform them of the pro's and con's and have them make the decision if it is worth the wait. It can become too frustrating for some buyers. There are so many variables and unknowns most of the time.

Buying a short sale is not like buying a property in a traditional way. A short sale may have some risk but it also can be very rewarding. When you are searching for a short sale you will want to make sure you are prepared. Here are some things you will need to consider.

First of all, you need to make sure that you have enough time. It takes anywhere from 30 days to 6 months or even more to get an answer on a short sale. It really depends on many factors. It requires a proof of funds letter if paying cash or a pre-approval letter from a lender if obtaining a mortgage. The seller must approve the purchase offer before it gets submitted to the bank. The bank may come back with a counteroffer or reject your offer completely. In some instances you may not even hear back from the bank at all.

Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure. The bank can ask the buyer to pay some of the liens or HOA fees. Some lenders will only pay up to a certain dollar amount and ask the buyer to pay the remainder or there is no deal.

One of the benefits of buying a short sale is that the bank is typically willing to accept less money for the property because of the time and risk involved. So you generally are getting the home at below market value.

If you have the time to wait, a short sale is a good way to go. One thing to be sure to ask when purchasing a short sale is, "who is handling it?" Is the Realtor an experienced short sale expert? Or is the listing agent using a Short Sale company that strictly focuses on short sales? By having someone with knowledge and expertise in short sales, it will make the process go much smoother.
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Old 04-29-2012, 07:55 AM
 
157 posts, read 347,739 times
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I use an agent on Siesta Key who specialises in short sales and foreclosures, if you would like his details feel free to DM me. His insights have been invaluable to me and have purchased five short sales. Some banks have changed their response times recently and are looking to process them quicker but the problem lies in how many loans are on the property. The principal loan may be responsive but other banks/investors may not want to take the hit. The short sales that I have purchased have been rewarding from a buyer point of view as the value has been less than bank owned property.

If your agent is unwilling to entertain a short sale I would look for a different realtor as they either don't have the experience or don't want the hassle, in either case they don't have your best interests to hand.
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Old 04-29-2012, 08:02 AM
 
Location: Lakewood Ranch, FL
5,636 posts, read 9,002,406 times
Reputation: 6837
Quote:
Originally Posted by siestachica View Post
If your agent is unwilling to entertain a short sale I would look for a different realtor as they either don't have the experience or don't want the hassle, in either case they don't have your best interests to hand.
Absolutely agree with this
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Old 04-29-2012, 11:24 AM
 
Location: Sarasota/ Bradenton - University Pkwy area
3,585 posts, read 5,144,717 times
Reputation: 3464
Some excellent points made here about short sales.

I've found the best way to approach short sales when working as a buyer's agent is to get as much preliminary info up front, ask the important questions:

How many lien holders are involved in the short sale?
(Any time there's more than 1 lien holder you can expect a longer approval time period.) That is especially true if there are other judgments, mechanic's liens, vendor liens and/or HOA liens. Remember, every lien holder has to be on board for a short sale to work.

Who are the lien holders involved in the short sale?
Some banks have more streamlined processes for handling short sales than others. Bank of America has just rolled out a new program to do responses in 20 days (we shall see how that plays out). Fannie & Freddie have also just announced they will be implementing changes June 15th to cut down their response time to 30 - 60 days.

Was PMI involved in the original transaction?
Mortgages with PMI typically take longer to get a response as another layer of negotiations is now involved.

Who is handling the short sale negotiations? The listing agent? Someone in their office? An attorney that specializes in short sales?
Knowing the skill level of the negotiator is something you definitely want to find out before you write an offer. One note here: Just because a law firm is handling the short sale does not always equate to a faster short sale. Check into the reputation of the law firm too.

Where is the seller at in the short sale process?
Has the preliminary short sale package been submitted to the lien holders? Has a BPO (Broker Price Opinion) been ordered yet? One of the critical elements in doing a successful short sale is the homeowner's willingness to submit to the lender(s) ALL required information and documents in a timely manner. The seller has to show a valid hardship that prohibits them from keeping the property. Loss of equity alone is not a valid reason for a short sale.

How cooperative does the listing agent appear to be?
Short sales do require more time and attention of both listing and selling agents. Cooperation is essential. A listing agent that won't respond in a timely manner to inquiries about the short sale listing is sending signals up front as to what kind of cooperation (or lack of) to expect during the short sale process.

Pricing of the property is another factor. Some short sale listings are priced at unrealistically low prices to entice offers from buyers. These typically run into problems down the road when the BPO is completed. A realistic price is at the lower end of the fair market value, not below it. Your agent should be able to pull up several comparable sales to determine where the particular property falls on the fair market scale.


Short sales are not predictable. But getting answers to the questions above will help determine if a particular transaction has a reasonable chance of closing. As I said, the time to gather that information is before writing an offer, not after.
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Old 04-29-2012, 12:02 PM
 
288 posts, read 395,904 times
Reputation: 162
Thank you
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Old 04-29-2012, 02:48 PM
 
279 posts, read 510,735 times
Reputation: 139
I was lucky to have a knowledgeable and patient realtor. Our short sale took 6 months but it was worth it
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