On your mark . . . get set . . . and . . . Wait!
You know exactly what I mean if you have tried to purchase a short sale lately. You did everything right, researched the area, got pre-approved for a loan and submitted a good clean offer (with no contingencies). The seller accepted your offer and you are both ready to close.
So what’s the hold up? It’s the LENDER. The lender must agree to a “short pay” in a short sale (accepting less than the amount owed on the property). And that’s not a simple request. The lender requires detailed information from the seller about their hardship and current financial situation. The lender also needs to know the current market value of the property. This could be ascertained through a traditional appraisal or, more likely, by having a BPO (Broker’s Price Opinion) done.
Once the bank has assembled this information, the file is assigned to a negotiator who will review the file and determine if a short sale is in the lender’s best interest. You’d think the process would be simple from there, but it’s not. These days the banks are FLOODED with requests for loan modifications and short sales. So much so that the negotiators are overwhelmed with more files on their desks than they can possibly handle in a timely fashion. So you wait. And wait a little longer. And then wait some more.
Don’t get me wrong, if you have the patience to work through the short sale process you could get a great property for a reasonable price. But the key word in buying a short sale is patience. There are still other options all of which have their own pros and cons. There are some traditional sales out there – but if there are priced right, they will go fast. And there are plenty of REOs (Bank owned properties) on the market, but many of these require fixing up. You need to be sure that you have the “know how” or the resources and budget to complete the job.
Another alternative to consider is purchasing a new home. Many of the new home builders are offering low prices and great incentives. And if you are short on patience, think about a spec home. Spec homes are completed or nearly completed homes that can close quickly. Be sure to check out the Home Builder first. The economic crises has hit homebuilders hard. If a builder is in financial trouble your earnest deposit could be at risk.
A real estate professional can help you navigate any of these purchases and warn you of potential risks. Armed with proper representation, knowledge and a big helping of patience, you’ll find the right home for you!
For more information on short sales, check out the National Association of Realtors website: Realtor.org
Teresa Dempsey (480) 634-7975 DempseyAZ.com
Teresa Dempsey is an Associate Broker with Keller Williams Legacy One Realty. Together with her husband Kevin they formed The Dempsey Group and offer a wide variety of real estate services including professional assistance for buyers, sellers and investors. Teresa spent the majority of her real estate career in the new home business and now uses that experience to help clients find the perfect new home. Visit DempseyAZ.com today or call Teresa at (480) 634-7975 for expert representation in a rough market. The Dempsey Group, Making a difference...One family at a time