Buying a Short Sale Bargain?
Pt. 1. - It Takes TIME! Get Your Expectations Set Right From the Beginning.
So, you think you've hit the jackpot! You've found the perfect bargain property. It's a short-sale, a lovely owner-occupied residential property in a great Georgia neighborhood. 
It's been clearly been lovingly cared-for by its occupants and is now being marketed for well under what the current owners paid (and probably still owe) on it. You've done your research, made your offer and the seller has accepted it. Yay! Well.... maybe. Snagging a real estate bargain usually requires some trade-offs, so don't start celebrating too soon.
You may be making a smaller dollar investment, but don't forget to
...consider the larger investment you will have to make in TIME.
The thing you must remember as a short sale buyer in Georgia is that -- it's not really going to be a SHORT sale, at least not as far as time is concerned. For, while you may have a meeting of the minds and binding agreement with the sellers, you don't have a doable deal until the sellers' lender approves. And that can take considerably longer than a "regular" transaction.
Sometimes the process takes several months, and the buyer should be made aware of this at the start.
Unfortunately, many short sales will "fall out" before the approval comes, because the buyers weren't prepared for the wait. A general rule of thumb is, the larger the lender, the longer the process. Consider that large lenders have more loans out there. So, a single processor may have hundreds of files on his or her desk at one time. According to reports I've heard, they are only expected or required to successfully process thirty or so of these per month. So.... it could be a long time before yours finds its way into their hands for review and approval.
So... you wait.
And wait. And wait some more.
Plan ahead for the time it will take. Be sure that your current housing arrangements and your budget will accommodate the possible delays. Beyond being extremely frustrating for all involved, the wait can also be costly.
For one thing, if prices are still declining in your neighborhood of choice, the price you agreed to six months ago may be too high to appraise by the time the approval comes through. This is usually okay with the buyer, but sometimes not so with the lender, who has the right to refuse the lower price.
Or, what if prices start inching up? What if the lender counters at a slightly higher price? Are you prepared for further negotiations, or an increased monthly payment?
For another thing, you may qualify for a loan now, but what if it stretches out for several more months? You'll probably have to re-qualify if negotiations go beyond the 90-day typical pre-qualification period. What if mortgage interest rates or your personal credit picture have changed by then?
So, be prepared for the time it is going to take and the adjustments you may have to make when buying a short sale. If you can hang in there and handle these variables, you can indeed snag the deal of a lifetime. THEN, when it's closed, you'll have good reason to break out the champagne!
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