Short Sale SellersWhat a Buyer Should Know About Short Sales
Current buyers looking for real estate need to be aware of the atypical process for real estate short sales vs. traditional sales. Short sale transactions behave differently and the short sale time line can be extensive or short, depending on how fast the seller’s agent and the lender who owns the loan acts on your seller approved short sale offer.
Short sales have been on the rise for the past year and are continuing to increase. Due to the better streamlined way of handling these transactions, lenders and banks are doing a better job of running short sale offers through the approval process.
The short sale approval offer acceptance works a little bit different than a traditional sale, in which the seller isn’t the last signer to make the contract binding between the seller and buyer. Once the seller has signed the final offer, that offer is sent to the mortgage lender(s) to be approved. There is a clause within the short sale addendum that states multiple offers can be submitted to the lender(s) for final approval. In some cases, this may cause the lender to delay in the short sale approval. Thus, in short sales, it is quite important to keep in the buyers mind that the offer made should be a strong offer since more offers will be submitted on the table and possibly over a month. The lenders realize with low offers (less than the listing price) may not cut it and the lender may instead “wait and see what happens” to get the highest and best offer. To get a short sale property that you thoroughly love, the best and highest offer must be submitted – whether it be more down on earnest, or a higher down payment, shorter escrow or higher offer price. Banks take a long time to respond to short sales and when they do take the time to respond, they will respond once. If another offer must be approved after the first approval, the bank could take another month or so to approve that price.