In the current troubled real estate market, just about everyone knows what a foreclosure is. An alternative to the dreaded bank takeover is the short sale.
A short sale is when the lender will accept an amount of money that is less than what is owed on a property. This is done buy selling the home quickly and the bank recouping what ever they can on the loan. It is not, however, an easy alternative to a foreclosure. A short sale is usually done under times of extreme duress where the homeowner cannot meet financial obligations due to sudden illness or some other catastrophic event. Some investors look for short sales as a way to buy a property at a reduced price. But a good deal may also come with some headaches that may make the investment a time consuming and frustrating experience.
These are the five most common complaints from buyers on a short sale:
1. Banks won’t accept a low offer on a short sale
Of course they won’t. Banks are in business to make money. Just because someone makes a lowball offer on a property – even if they are the only bidder – doesn’t mean the bank will accept it. Your bid must be realistic. A bank won’t just give a property away. They have an obligation to their investors and shareholders to uphold best practice and get as close to a fair market value as possible.
2. “This is taking too much time”
Lenders are in no hurry to cash in on a short sale home. Be prepared for a longer than normal escrow due to the additional red tape of a short sale. This is no sense of urgency on the bank’s behalf when they are working on a deal that will see them lose money.
3. Last minute postponements and cancellations
This happens a lot when it comes to short sales. Considering the homeowner is usually not very pleased at having to sell their home, all sorts of things can happen between the time you make an offer and the final sale. The bank may change the offer, or the owner may suddenly come into some money that will help them make payments. It happens, so don’t make your final moving plans until you get the green light on all fronts.
4. The bank won’t provide answers
To continue reading this article and many others click Buyer beware – common short sale complaints
Comments(2)