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Health & Fitness

Short Sales Aren't That Short

Short sales require patience and may not be the best deal.

I am wondering why the banks decided to call a house "sold" prior to foreclosure a short sale. There is nothing short about the process. It is frustrating and requires a ton of patience. If anything; it is a long sale! 

I am representing a client who has been waiting for an answer from the bank for over two months. His offer is a good offer and he is more than qualified to purchase the house. The bank, however, is in no hurry to sell the property. 

The current seller has money in the bank but the bank wants him to be penniless before they will forgive the million dollars we are asking them to forgive.  I know this is a lot of money, but the banks are doing this routinely. The seller is not a bad guy; he was a builder who is now losing his home like so many other builders before him. 

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This builder just managed to hang on to his home a little longer and he kept thinking that the economy would turn around and that he would be able to outrun the fate of others like him. 

The biggest problem with the short sale process is this: Banks don't care about the buyer; they have no sense of urgency and they take their sweet time while the buyer agonizes about whether or not they will get the house they want. It's simply a numbers game for the bank; they want to recover as much money as possible since they have been losing so much money on all of the foreclosures. 

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In a way you can't blame them, but then on the other hand, we want them to understand that the buyer is not the enemy, the buyer is ready to get this debt off the bank books. 

This is where I start yearning for the good ole days when buyers and sellers got mad at each other. The buyer making a low offer and the seller getting offended! But hey; at least they were communicating! The entire process of buying a house would take about 30 days! Negotiating the contract only took a couple of days (not months) and in the end, the seller and the buyer met at the closing table as friends. 

The buyer would always get helpful information from the seller about the schools, neighborhood, shopping and churches. Aaaahhhh "back in the day"! 

So here are a few tips about buying a short sale:

Bring your patience. Know that sellers are not taking care of the properties (if they are not paying the mortgage, they don't care about the HAVAC filters) and they are not paying much attention to the maintenance in general. 

Get inspections on all of the systems, structure and termites. 

Make sure that your binding agreement date is when the bank signs the offer, not when the seller signs the offer. 

And make sure that you list the appliances in the offer along with the light fixtures and other items the seller claims they are leaving with the property. Sellers are often angry that they are not making any money and they take things at the last minute, so do a walk through before you go to the closing table!

And most of all remember: Short sales and foreclosures are not the only good deals out there. Sellers are negotiating more now than ever because they are in competition with the short sales and foreclosures. Not to mention that appraisers are using them for appraisals and it brings down the value of any home on the market in the same neighborhood.  

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