Many of my purchasers ask me what are my thoughts about short-sales. My answer is SIMPLE..."STAY Away From SHORT-SALES!" The experience of a short-sale is usually a sobering and depressing one, especially for a first-time purchaser.
I will summarize to homebuyers why a short-sale is not the best option for your first homebuying experience, I have created a list of factors as follows:
1. Time-consuming: The short-sale process has not been streamlined so there is no set procedure for the whole process. Banks have their own guidelines and timeframe for managing short-sales. A short-sale can take anywhere from 3 to 8 months for approval and actually getting keys at settlement.
2. No Guaranteed Outcome: The major dilemma with the short sale method is simply the lack of COMMUNICATION. In most financial institutions, there are two departments: 1)short-sale dept. 2)foreclosure dept. Neither of these offices communicate to each other relating to a particular property. Despite a property being approved for a short-sale, the foreclosure department is still planning ahead with the foreclosure. There are many situations after 2-3 months into a short-sale, the seller and buyer will be astonished to find out the residence has gone into foreclosure and will be sold on the court house steps.
3. Squandering of Money: Most buyers thinking about acquiring short sale are looking to spend less money on a "GREAT DEAL." However when factoring in the opportunity cost of your time on a short-sale at best you breakeven. I have many clients invest in appraisals and home inspections just to find out the banking institution has decided not to approve the short-sale.
4. Cost you more money: A short-sale is not always a great deal because the bank will not always guarantee to pay the fees associated with the transaction. For example, if you are in a transaction and the financial institution decides not the pay the agent commission or attorney fees, then the seller and/or buyer would be liable.
I will summarize to homebuyers why a short-sale is not the best option for your first homebuying experience, I have created a list of factors as follows:
1. Time-consuming: The short-sale process has not been streamlined so there is no set procedure for the whole process. Banks have their own guidelines and timeframe for managing short-sales. A short-sale can take anywhere from 3 to 8 months for approval and actually getting keys at settlement.
2. No Guaranteed Outcome: The major dilemma with the short sale method is simply the lack of COMMUNICATION. In most financial institutions, there are two departments: 1)short-sale dept. 2)foreclosure dept. Neither of these offices communicate to each other relating to a particular property. Despite a property being approved for a short-sale, the foreclosure department is still planning ahead with the foreclosure. There are many situations after 2-3 months into a short-sale, the seller and buyer will be astonished to find out the residence has gone into foreclosure and will be sold on the court house steps.
3. Squandering of Money: Most buyers thinking about acquiring short sale are looking to spend less money on a "GREAT DEAL." However when factoring in the opportunity cost of your time on a short-sale at best you breakeven. I have many clients invest in appraisals and home inspections just to find out the banking institution has decided not to approve the short-sale.
4. Cost you more money: A short-sale is not always a great deal because the bank will not always guarantee to pay the fees associated with the transaction. For example, if you are in a transaction and the financial institution decides not the pay the agent commission or attorney fees, then the seller and/or buyer would be liable.
About the Author:
Learn more about washington dc real estate. Stop by Jason Trotman's site where you can find out all about first-time homebuying and what it can do for you.
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