We're bombarded by the negativity of why buyers should steer away from short sales, and in some cases I would agree, here's just a couple:
- Lien holder's take months to give approvals
- The list price hasn't been approved and is totally unrealistic.
Of course there are more but that's not what this post is about. This post is about the buyers who get scared, panic and back out when the short sale has a green light( In one case the green light was given in a matter of just days).
I have 2 shorts sales where the sellers have done everything necessary to get this done. The lien holders (Taylor Bean and Whitaker and American Home Mortgage Servicing, formally known as Option One) have obviously have systems in place and get the job done. Within weeks T,B and W had a BPO ordered, come back and written short sale approval. Within days, yes days, AHMSI had a written short sale approval.
One home has had 3 contracts and the other has had 2 and in all 5 cases the buyers backed out, at no fault of the seller and lien holders. Talk about frustration. Here's been some reasons:
- Buyer's interest rate went up causing their payments to increase by about $50 a month.
- Buyer couldn't come up with the binder.
- PMI company required 10% down, buyer only had 5%.
- FEAR, the buyer listened to the media and was scared to proceed.
- Buyer looked at only one house and wanted to see what else is out there.
All these are legitimate reasons, but all should be researched before you put a contract on a home. I totally get buyers are cautious and they should be! This is one of the biggest purchases of most people's lives so you should proceed with caution...I repeat.....BEFORE you put a contract on a home.
A written short sale approval in days or weeks is a rare and precious event, many buyers wait months for a home that never gets approve.
The moral of the story is:
- Continue to be smart buyers and learn from the mistakes of the current homeowners.
- Get pre-approved before you even begin to even look at homes.
- Know how much you need down and have it available.
- Work with an agent who is knowledgable in short sales.
- Don't buy the first house you see without seeing some others first.
The last thing I want buyers to remember is, there are people and families behind that short sale who needs to sell and this is a very emotionally time for them as well. Be considerate and don't put a contract on their home if you're not serious to follow through.