Buying a short sale in Savannah GA, Potential vs Approved Short Sale: Do you know the difference?
Many buyers looking for a great deal on a home in Savannah, Ga, often turn to short sales as an alternative to foreclosures. Depending on your needs and expectations, this can be a great idea. But if you don't know the difference between a potential vs approved short sale, it can be a truly frustrating experience. First, the definition of a short sale is a home that a seller is trying to sell for less than the current balance on his mortgage. There are two parts to the sale being successful, the seller being approved based upon his financial situation, and the price which is agreed upon, being approved by the lender.
What is the difference between a potential vs approved short sale?:
A potential short sale is one in which the seller has not been approved based upon financial hardship or the price that the home is listed for has not been approved by the lender. Sometimes both of these conditions have not been met. As soon as a seller requests a short sale, some of the larger lenders will order a Broker Price Opinion (similar to an appraisal), to get an idea of a reasonable expectation of what the home is worth. They then convey that information to the Listing agent so that the listing price can be adjusted accordingly. The lender may also request preliminary information from the seller, to assess their financial situation.
An approved short sale is one in which the seller has been approved based upon her hardship and the price that the lender is willing to accept has been agreed upon.
For a buyer, either one of these scenarios can result in a successful home buying experience, but there are two major difference between Potential vs Approved Short Sales:
1) Time- a potential short sale can take up to a year to get through the process. The lenders have made great strides recently in shortening the time to get through the process but is not unusual for it to be a six month ordeal.
2) Unfortunately, after waiting through all of it, the seller can be turned down. An approved short sale can usually close within 45 days of the lender approving the final negotiated price.
As a Realtor in Savannah, Ga, I have seen this process change, literally monthly. So now you are asking, "why buy a short sale ?" The lenders realize that it is in their best interest to negotiate with sellers before the foreclosure takes place. It costs the lender more money if the home goes into foreclosure. And from a buyer's standpoint, they will be able to find out information about the home from the seller. When the bank owns the home, there is no seller's disclosure, as the bank doesn't know anything about it. Also, the buyer can potentially incur additional costs as compared to a short sale, such as appliances, deferred maintenance and repairs.
I have experience representing both buyers and sellers of short sale homes in Savannah, Ga. To view homes that I have currently available in Savannah, Ga click here
I would love to assist you with the process of buying potential or approved short sale home in Savannah, Ga.Please contact me at 912-629-2700 or 912-657-1802.