Last week I started a two-part series looking at considerations when purchasing a home being sold as a â€œshort sale.â€ If you missed the first installment, go to www.coloradodreamhouse.com and click on the â€œNewsâ€ button.
Now, picking up where we left off last week, we continue with a few more things to ponder when purchasing a short sale. First, what if the bank takes two weeks to a month, or even two months, to give you an acceptance or a rejection on your short sale offer? Do you go ahead and spend the money on the inspection and/or appraisal, trying to stick with your closing timetable? I heard a story in which a homeowner did not get an acceptance on his offer until the day before closing. He really wanted the house, so he gambled on waiting two months and paid for the inspection as well as the appraisal, all without an accepted offer.
Short sales are not a good way to go if you need to move into a home right away. The average amount of time to close a short sale home is anywhere from 45 to 60 days, sometimes even longer. And short sales arenâ€™t always the best value for the money. Properties already bank owned or those offered by private sellers might be better deals.
And get this: In most cases banks will keep the property on the market even though youâ€™re under contract. Not a good thing for you, the buyer, because the bank is still looking for offers. Which brings us to my final point, and I have saved the best for last. Banks involved in short sales can pull out of the deal on the day of closing because they received a better offer.
These are just the potential problems for buyers; we havenâ€™t even touched on the sellerâ€™s side. Of course, your short-sale purchase may come off without a hitch. But in this market, itâ€™s buyers beware.