Saturday, February 6, 2010
Short Sale--An Oxymoron--A Word for Wait
People hear "short sale" and think "Great! It won't take too long". Unfortunately, the term short sale refers to the home selling for less than the sellers owe on it. So they will come up "Short" of what they owe.
Because the banks aren't anxious to take the loss, they mull over the sellers' financial records and the process takes anywhere from 3 months to 6 months on average to get an acceptance, if the bank approves it. There are circumstances where the bank won't approve the short sale, and the home moves into foreclosure.
What happens while you wait and wait for an answer to your offer? Once your offer emerges from the bottom of the piles, the bank starts by reviewing the seller's financial records. In variably, they are missing or need updated records. Next they order their own appraisal or a Broker Price Opinion (BPO) to insure the offer price is reasonable. Then they ask for the breakdown of the closing costs to see what they can cut there.
So you wait and wait, and then finally the day comes when they send an approval letter. Now the race is on. The banks will typically give you no more than 30 days to get it closed and will coerce you with late fines.
So is all the waiting worth it. If it is the home you have been searching for, it is usually worth it in the long run. You can usually get a home at a good price, and if nothing more you learn a valuable lesson in patience.
“Patience and fortitude conquer all things” Ralph Waldo Emerson
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