when is a Short Sale actually a Short Sale ?

April 26, 2008

we have never had so many requests from buyers who only are interested in short sales, foreclosures, or (REO) bank owned properties.

However, when it comes to buying these types of properties, there are many differences.

One of the most common and sought after is the “Short Sale“.short sale

However, not all Short Sale are alike.

In fact, not all Short Sale are even a Short Sale at all.

This morning, a real estate investor called and told me that he had put an offer in on a “short sale” home recently. He shared with me that it has been more than 10 days ago and had not heard anything from the bank and that the realtor said to be patient.

He wanted my advice. Here’s what I shared.

Unfortunately, many, if not most “short sale”  listed in the MLS are not approved “short sale”

The real estate agents, just take a listing, and market and advertise the home at a price that would net the seller less than the amount owed. Then, when an offer is received the listing broker submits that offer to the bank. I was told by a well respected teacher at the AZ School of Real Estate , Bill Dowdy, that this is averaging about 78 days! yes, almost 3 months.

The more professional way to handle a proposed “short sale”, (I say proposed, because, not all banks will approve a “short sale”) is a step by step process that if approved, the bank will in effect, issue a “short sale”approval.

I can walk you through a detailed and step by step process if you request. However, in a nutshell, you need a hardship letter, and substantiation of financial information that you really cannot afford to pay any further.

Now, when a seller receives this Certificate of “approval” , the property can effectively be marketed and sold as a “short sale”.

These ’short-sales’ are the only kind of properties I recommend to my clients on which to make offers. W

e get a speedy response and if offer is not accepted we can move on to the next“short sale”and not wait 75 days to know whether or not our offer is accepted or declined.

Be careful, speak with your real estate professional, there are many issues such as rights to earnest monies, breach of contract, etc… that buyers face when making offers on “short sale” properties; especially, those that have not yet been approved by the seller’s lending institution.

Short sales are much different than Foreclosures and REO real estate.

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Copyright © 2008 By James Wexler, All Rights Reserved. *when is a Short Sale actually a Short Sale ?*

Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs.

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Written by James Wexler · Filed Under Articles, Buyers, Investing, Sellers, Short-sales / Foreclosures 

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