This is the fifth post in a blog series on the advantages and disadvantages of buying a short sale. So far in this series, we've covered: 1) What’s Your Time Frame for Moving? 2) How much under market value are you purchasing the property for? 3) How experienced is the listing agent? 4) How many loans does the seller have?
A buyer client just asked me some great questions about the short sale process, so I thought I would incorporate the answers into a blog post in this series:
1) What’s the shortest short sale closing that you’ve ever experienced?
The shortest short sale closing I’ve experienced was 4 months. The longest I’ve had was almost 7 months. Usually, short sales take at least 3 months to close.
2) Can you offer lower than list price on short sales?
Yes, buyers can make lower offers than list price on short sales. Sometimes, a listing agent has priced a property higher than the market can really support because they have to be able to demonstrate to the seller’s lender (who is taking a loss on the sale) that they’re doing the best they can to get as high a price as possible.
On the other hand, sometimes a list price is higher because the seller is so deeply underwater on their home with regard to what they owe their lender. It just depends.
At the end of the day, regardless of whether or not a buyer offers list price or lower, the seller’s lender has to approve the sale. If the lender feels the price being offered is too low, they won’t issue their approval on the sale and instead will counter offer at a higher price. If the buyer doesn’t like the higher price, they can walk away from the sale.
The challenge is that the lender’s decision process regarding approval can a long time, sometimes just two months, but often longer. That’s why the closing periods for these types of sales take so much more time than standard sales.
I’m an expert when it comes to helping buyers purchase short sales, so if you’re considering this type of sale, contact me at 703-462-0700.
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