A year or more ago, the majority of articles about short sales were quick to mention that banks didn't seem to want to do them. Evidence of this was the long time delays in responding to offers, and then responding with high counter offers that made the short sale a non-deal for the buyer. The buyers for short sale properties were mostly investors looking to buy at steep discounts, and they could wait for a slow response.
These days banks seem to be more likely to entertain short sale offers. They're finding that the foreclosure process is too costly, and seem to be more willing to get bad loans off their books, even with a steep loss in a short sale. One thing they're not doing much better at is responding in a timely manner to offers. Reports from the real estate industry show that buyers are still walking away from short sales after they may have worked for months to get one approved and closed.
The good news is that regular home buyers can manage a short sale purchase to buy the home in which they want to live. The bad news is that it's still far from a speedy process. Advice to a home buyer who wants to try a short sale includes:
- Locate the home you want with a distressed buyer having no luck selling and behind on mortgage payments.
- Study the market, and make sure that the price at which you can likely buy is going to get you the home at a discount that will put you into a positive equity position from day one.
- Get ready for several months of waiting and submitting paperwork over and over again.
- Don't be shy, getting contact information and following up with lender personnel regularly ... keep prodding.
- Most of all, be in a situation with your current housing that allows you to take the slow approach. Don't be in a situation where you have deadlines on your side, as the bank will probably push you to the point of walking away if you have pressure to move.
While they're not fun to negotiate, and many don't make it to closing, buying a home at 30%+ discounts to today's already low prices can make the short sale process worthwhile.