If you have been paying attention to the real estate market lately you have read and heard a lot about Short Sales. A Short Sale occurs when a home-owner can no longer manage the mortgage and upkeep of the house but can not make enough money selling it. The home-owner’s real estate agent helps the home-owner set up the Short Sale.

From a buyer’s point of view a Short Sale can present an opportunity for a bargain but before you charge headlong into it, there are some things you need to keep in mind.

• Red-tape Can Make You Blue- In order to submit an offer on a Short Sale, most banks want a Purchase and Sales contract rather than an offer (a difference of 3 or more pages). They also want proof of funds or at the very least a pre-approval.
• The Waiting is the Hardest Part - Once you get the home-owner’s agreement on price your offer is forwarded to the bank for a required approval. This step can take an exceptionally long time. I have waited up to six weeks for a response (not unusual). So if you have a fairly firm time-line for buying then Short Sale transactions may not be for you.
• What You See is What You Get- While you are provided disclosures with a Short Sale (in most cases) and you have an opportunity to have inspections performed on the property, the bank is not in the business of re-negotiating after inspection unless there is a SERIOUS impact to value or safety. When you make your offer, take into consideration all things that cause you concern. If an inspection shows deficient conditions that you dont want to correct and the bank will not re-negotiate (or you don’t have the required time to re-negotiate before closing) you can ask to be released from the contract.
• Fees Required - Keep cash on hand or fold it into your mortgage (when feasible and allowable) because the bank will not pick up closing costs and neither will the seller in most instances.

So to sum it up, to get a great deal on a Short Sale Transaction you need good financing, closing costs, and patience.

There are other concerns you may have based on your unique situation so it is always beneficial to work with a Realtor who has experience working through Short Sales. In Rhode Island you can call me - Kirsten!