Buying a Short Sale
Definition of a Short Sale:
A Short Sale of Real Estate is a sale in which the final sale proceeds fall short of the payoff balance of all the combined mortgages attached to the property. A lender may consider accepting a Short Sale when presented with a fair market offer.
Short Sale from the buyers perspective.
For the last 3 years Short Sale purchases have earned a bad reputation. Processing was slow, sometimes taking as long as 9 months to a year. The reason for the slow and inefficient processing was simply, the banks being overwhelmed with short sale requests and not prepared for the influx. Keep in mind the Real Estate market has seen some significant changes in market conditions and lending conditions in a relatively short period of time. Short Sales still require patience from the buyer, but with higher closing ratios this inconvenience can be offset with less competition for said property and a chance at getting a great deal.
Some Real Estate agents are still avoiding short sales and advising their clients to avoid due to the reasons above.
This is a big mistake!!
Lenders have been steadily improving their short sale processing over the past 2 years, and depending on the lender, short sale approvals can now take as little as 10-14 business days. Lenders are motivated to complete short sales as opposed to their alternative, a foreclosure. As a result, the paradigm is shifting and you will see short sales eventually dominating the distressed property market. Lenders lose less money and can keep property values from further decline by selling the property at today’s fair market value.
We believe in embracing all potential options for our buyers, including short sales and REO’s. All short sales have a unique situation and require research to make sure the short sale has a high probability of closing with a fair offer. There are many home buying opportunities in the San Diego area, why take any options off the table?
Please contact us if you have any properties of interest you would like us to research.