Pre-Forclosures and Short Sales

Most short sales are listed on the MLS just like traditional sales. Often the listing price is lower than expected for the market to attract buyer's attention. Just because the house is on the market and listed as a short sale, that doesn't guarantee the bank will allow the short sale. The list price may be less than what the bank will approve.

When a short sale is made, the price the buyer offers is less than what the seller owes on the home. Therefore, the lender(s) that will be losing money must approve the sale. Usually it will take 6 to 8 weeks from the time an offer is submitted for the bank to approve it or deny it. Sometimes banks respond in 6 to 8 months, or not at all!

It's possible the house could go to foreclosure before the lender approves your offer. And, it's unlikely the bank will allow any money to be invested for repairs.

You may get a better price through a short sale than buying from a non-duressed homeowner. However, if you make two offers and wait eight weeks and find both denied, your ability to purchase may be altered within that timeframe. Rates could go up, more lenders go out of business, or loan programs end. A well-written, contingent offer is important to protect your interests as a buyer.

If you live in the bay area and you are considering the purchase of a short sale property, call us for advice! As expert negotiators, we can help you determine a valid market price that will streamline the process and advise you of recommended inspections and/or prospective rehabilitation costs. Click here to conect to our main real estate home page.