Step 1: Do some homework.
Step 2: Do not confuse a short sale with a foreclosure.
Step 3: Do not think you will automatically get an unheard of ‘deal’.
Step 4: Do more homework.
A short sale, besides its paradoxical name, is not short. A dictionary definition would read something like this:
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens (mortgages) against the property, and the property owner cannot afford to repay the liens’ full amounts, and whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. In short (get it?), the seller usually either can’t afford their mortgage or the property’s value is no longer there and it is wiser to let it go.
Today a couple of my buying clients closed on a condo in Uptown Charlotte’s Gateway Plaza (below) that was a short sale transaction. Today is March 13, 2013. The contract was signed July 18, 2012. Eight months. Eight months it took to get to this table, and we only sat at said table for 11 minutes. In this case, the property was a steal. The seller bought the condo a few short years ago for $100,000 more that what the buyers just wrote a check for. Winning!
Back to the dirty side of things. When making an offer on a short sale listing do not expect a timely response from the seller’s mortgage company. Secondly, expect lots of paperwork once you finally receive the acceptance. Paperwork that you will most likely sign multiple times, and it doesn’t matter because you are now on their bank’s terms. Then it is usually a waiting game often filled with strict deadlines. Of course, some transactions are smoother and quicker than others, but chances are you will be waiting. My advice: continue looking for other properties in case something
better easier pops up. If you can wait, it can be rewarding!
I only tapped into the basics of a short sale here. Good luck, and if you need additional advice or assistance regarding short sales, foreclosures, regular sales, or anything real estate related, contact me!