Beware the Mine Fields of Short Sales

Disappointed is the word I hear from my buyers as well as others in their attempts to purchase a short sale property. You can be a cash buyer and offer the full listing price or higher and still wait months for an answer from the banks. "Red tape" is very common in short sales, requiring potentially multiple levels of approvals and conditions. There are so many short sales now that it is complete chaos in many situations. Many properties have problems due to neglect and should be fully inspected.

A short sale is when the owner of a property is delinquent in their payments and the bank or lender discounts the loan balance and allows the property to be sold "short" of what is owed. This is usually done in a declining market, when more money is owed than the property is worth. Banks will allow a short sale when they believe it will result in a smaller financial loss than foreclosing.

If you want to pursue a short sale, you must be patient and prepared for the bank to turn down the offer. You should use a title company or attorney well versed in short sales. You should get a complete set of credible inspections to avoid unseen problems with the property. Short sales can be very attractive but you should use a Realtor who can steer you through the mine fields.

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