Buying a short sale home sure sounds tempting, when you hear about families like the Grossenbachers who were able to save about 50,000 dollars off their home's price. But there are plenty of reasons to think twice.
First, not every short sale home is a good deal. Sometimes the buyer just paid too much for the home which has declined sharply in value. Or, maybe the buyer just borrowed too much when credit was easy.
Second, even if your offer is the highest, it doesn't necessarily mean you'll get the home. Some banks want the buyers with the largest down payments. Others only want an all cash offer. So, it's hard to predict what will happen.
Third, there are often many "layers" of approval at a bank. According to real estate attorney Steven Decker, banks will often give a verbal "acceptance" of a buyer's offer, only to have another division reject it.
These are only a few reasons to be wary of short sale homes. I'd love to hear some of your experiences, both horror stories and happy endings.
Comments
It wasn't till I was ready to buy a home in this market that I saw so many REOs and short sales on the MLS for sale. Short sales are quite a different process for any type of buyer and you don't feel like you HAVE the house, until escrow actually closes. There are so many obstacles and long time lines that could make the deal go "poof"!
I've never heard of buying a house before foreclosure. It seems like a best kept secret. Where can I get a list of properties for my area? Who do I contact? If it saves the credit rating of the seller, gives the mortgage company a reasonable out, and gives a buyer a cost saving, why aren't the mortgage company advertising? DB