03-07-2009, 07:09 PM
John is right, the biggest obstacle is the lender. There was an article in the PBN recently, only 18% of the short sales closed in the time period mentioned. I closed on one last year, it took four months to close and the lender put in last minute conditions. (Yes Mr. Buyer, be prepared to pay all the closing cost!) I closed on one this year too, it took only two months, but the lender only took a $5,000 loss, so they gladly signed off on everything. I have another one pending since last October, nobody barks at us from the lender's side.
The biggest problem with short sales is that the seller lists the property and will accept any offer hoping the lender will sign off on it too. Even though banks don't want to be property owners (foreclosure,) they don't just rubber stamp short sales.
There are few listings with already approved short sales, as a buyer I would rather go for those. The buyer's agent has to be smart with preparing the offer to make sure the buyer will not have to spend any funds up front for the loan until final approval from the lender. Another issue for the buyer is the lack of disclosure. You buy what you see, you have no recourse, so make sure you have a good home inspector.
I took a class on short sales last year and I was surprised to see the small number of real agents taking the time to get educated in this subject. If you are considering buying a short sale property make sure your agent knows the ins and outs, otherwise you might not get the kind of representation you need.
Aloha,
John S. Rabi, GM,ARB,BFT,CM,CBR,FHS,PB,RB
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"
The biggest problem with short sales is that the seller lists the property and will accept any offer hoping the lender will sign off on it too. Even though banks don't want to be property owners (foreclosure,) they don't just rubber stamp short sales.
There are few listings with already approved short sales, as a buyer I would rather go for those. The buyer's agent has to be smart with preparing the offer to make sure the buyer will not have to spend any funds up front for the loan until final approval from the lender. Another issue for the buyer is the lack of disclosure. You buy what you see, you have no recourse, so make sure you have a good home inspector.
I took a class on short sales last year and I was surprised to see the small number of real agents taking the time to get educated in this subject. If you are considering buying a short sale property make sure your agent knows the ins and outs, otherwise you might not get the kind of representation you need.
Aloha,
John S. Rabi, GM,ARB,BFT,CM,CBR,FHS,PB,RB
808.989.1314
http://www.JohnRabi.com
Typically Tropical Properties
"The Next Level of Service!"