First Time Home Buyer in Highlands County: Is a Short Sale right for me?

First Time Home buyer in Highlands County: Is a Short Sale right for me?
A short sale is not much different from a regular sale, the only difference being that it will take longer to close because the seller’s lender has to approve the sale. The lender’s approval is a contingency in the contract that the seller needs to remove, by getting approval, in order for the transaction to close.

How long does it take to get approval?
We don’t know. There is no rule and there are no guidelines. We have had approval within 3 weeks and we have transactions that are still awaiting approval after 4 months. From experience we know that some lenders are very backed-up when it comes to short sales, some lenders have a more efficient system in place to process short sales. It varies from lender to lender.

Why would I want to purchase a short sale?
We already know that it might take a considerable amount of time from offer to closing, if we can obtain sale approval from the seller’s lender (we never had one of our short sale not approve but it could happen). If you are not on a time frame, meaning if you are currently renting or do not need to move into your new home by a certain date, then a short sale might be a great opportunity for you to buy a home that was completely out of reach just a year ago. Example: 4 bedroom, 2 bathroom, built in 2007, marble counters and all the works – $230,000 when it was built, $180,000 last summer, $99,000 today. You do the math.

What can I do to get my offer approved?
1. Make a good offer: Many buyers figure that it makes sense to start out with a lower offer to leave room for negotiating. This holds true if you are dealing with a seller who does NOT need to obtain a sale approval from his or her lender. In a short sale, the seller’s lender is not in the business to negotiate real estate deals, they are not even in the business to sell homes. Their business is lending money. Make it easy for the lender – make your highest and best offer! Think of it this way: you are already making an offer that is below market value and while short sales are great opportunities to purchase a home for a lot less, they are not liquidation sales. Do not expect to get the property for next to nothing.
2. Provide Proof of Funds: If you wish to pay cash for your short sale, provide a bank statement along with the offer. This lets the seller’s lender know you are serious and you are financially able to close the deal! If you are financing, provide at least a pre-approval letter. If you can, don’t ask for seller concessions or extensive repairs. The seller is not likely to be able to pay for discount points or help you with your closing cost. The seller’s lender isn’t likely to pay for these expenses either. It’s a short sale – the seller is losing money, his or her lender is losing money. Most short sales are being offered “as-is”, which means you purchase what you see with the right to inspect.