After reading about a local story about a soldier's family, victims of a (another) short sale gone bad. I wish they were better informed.
Did you know that properties listed as a short sale are over 30% of the Cape Coral, Fort Myers, and Lehigh Acres MLS area?
Buyers are attracted to short sales because they THINK they're getting a good deal. A potential buyer finds home online or by making sign calls listed for a price that is TOO LOW for a home in that neighborhood. They are really excited and want to jump all over it. They're getting a DEAL! But before jumping, ask yourself, if this is too good to be true, maybe it's not for real after all. You may be about to make an offer a pre-foreclosure, short sale home. At best short sales are unpredictable. They are never short.
You'll spare yourself a lot of grief by educating yourself about short sales.
Of the approximately 4500 properties listed as a short sale in the Cape Coral, Fort Myers, and Lehigh Acres MLS how many of these sellers qualify to short sell their property? Is their bank accepting short sales? How many lenders are involved? Does the listing agent know how to transact a short sale? Only 158 short sale transactions have completed since January 1st. Not a very good tract record.
What's wrong with Short Sales?
A short sale SHOULD mean the seller's lender will accept less than the mortgage payoff and release the existing mortgage. Properties listed as a short sale does not mean the lender will accept your offer, even if you offer the listing price and if the seller signs the sales agreement. In other words it's NOT necessarily FOR SALE.
What to do?
Get representation! I can't stress this enough! Hire an EXPERIENCED REALTOR to work for you. Your Realtor can research the property. Find out who is on title, if a LIS PENDEN has been filed and how much is owed on the property. They will also know the tract record of the listing agent.
A buyer should considerer the following when deciding to pursue the deal. Is the SELLER actually qualified to short sell the home? Has the listing agent submitted the entire short sale package? Is the seller available and cooperating? This is crucial to the deal. If the seller can afford to make payment, the lender won't let him off the hook. The seller may end up having a judgment against him for the difference between the selling price and the mortgage amount.
Have your REALTOR create a CMA to determine the actual value of the property. Don't be surprised if the value is higher than the listing price. Expect the bank to counter at a hire price.
If there are two loans involved, from different lenders, you will have a problem.
Even if you complete all the steps, be prepared to wait up to 3 months to close.