The other day a prospective buyer asked me about pre-approved short sales. She and her husband had been advised to stay away from short sales. I responded with the following: In order to be successful at a short sale, the owner of the property needs to be able to demonstrate a financial hardship (loss of a job, matrimonial issues, illness, etc.), and not have equity in their home. The house must not be worth on the market as much as you need to pay the bank back. The contract is always between you and the owner of the property. The bank gets involved because they have to say whether or not they will accept the sale proceeds as payment in full because the owner has shown his hardship prevents him from paying them back. By “approved short sale” I think you mean “does the owner meet the criteria”. Every offer is different, and a unique set of circumstances govern. Before a house is listed as a short sale, the owner should be qualified to make sure he/she meets the criteria above. Because the bank needs to approve the short sale, they can take a very long time to complete. My guess is that’s why someone advised you to stay away from them. I’ve had an approval in 2 ½ weeks. I’ve also had one that took over a year. I try to minimize the amount of money that’s tied up as an earnest-money deposit, and to also write the contract in such a way that says basically “If you don’t approve this within a certain time-frame, we will cancel this contract”. But if you have the luxury of time they can be a great way to buy a home. To search for homes, short sale or otherwise in the 33467 zipcode area, go to 33467homes.info. This article dealing with potential pitfalls when buying a short sale.
Posted on: Tue, 25 Jun 2013 20:17:59 +0000