Back in November of 2008 I wrote an offer for a home that was being offered as a short sale.  In December of 2008, I wrote another for a client on a home that was being offered as a short sale.  It is now March 4, 2009 and both of the escrows will close today.  I know one of my clients knew that the short sale process would take some time but the other client was clueless.  Before writing the offer in November, I explained the short sale process to my client and asked him if he was sure that this was what he wanted to do.  When I told him that the short sale could take some time, I don't think he really understood just how much time we were talking.

How much are you really saving when you buy a home listed as a short sale?

Three days before the short sale closed, the property next door came on the market for what appeared to be a fantastic price.  The home is being offered for $15,000.00 less than my client paid for his and the new listing has twice the square footage.  At first glance, it looked like my client is now paying too much for his home, but you needs to get past the first glance.  Once I took a look at this property, it was clear why it was being listed at such a price.  The house is in shambles and is going to need $25,000 to $30,000 in repairs.

While the Big Bear market is a resort market, it has not been insulated from the current economic developments. Values have dropped and homes are selling for prices that we haven't seen since 2003 and 2004. 

That being said, I would be very careful before getting involved with a short sale here in Big Bear, or anywhere else for that matter without having some buyer protections built in to the contract.  The last thing that you want as a buyer is to be under contract on a escrow that won't close.  The wonderful deal that you thought you were getting on that cabin in Big Bear could end up costing you more than it's worth if the escrow goes on too long.