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Short Sales - Profit Through Patience!

Short sales burst on the real estate scene shortly after the real estate bubble burst in mid 2008. A short sale is characterized by a sales price that is not high enough to clear all debt, liens, and costs of the sale; and which require approval by a third party or other parties not in title to the property.

In many instances, approval by a lender is required to complete the transaction. Naturally, the lender wants to minimize their loss by making sure they receive the best price possible, and so may delay giving their approval until the very last minute in order to consider additional offers. If the property is in foreclosure (SEE BANK-OWNED PROPERTIES), there is also the looming date of the Trustee's Sale where title to the property will revert to the lender.

If the third party is a bankruptcy trustee, the executor of an estate, or the like, then a court hearing and a decision by the judge may be required before the contingency can be removed. The requirement for a hearing can add significant time to the process.

A few of the possible risks to either the buyer and/or seller that are inherent in short sales are:
  • The deal is not final until approved in writing by the third party even though the buyer and seller have signed reaching mutual acceptance.
  • The third party approval may not be granted until the very last minute.
  • The third party may require that the property remain on the market, resulting in additional offers.
  • The third party may require changes to the transaction such as price, terms, conditions and closing date.
  • The third party may refuse to give consent thereby causing the sale to fail.
  • If the buyer pays for inspections and other forms of due diligence prior to third party written consent, the buyer may not recover these funds if the sale fails.
These transactions can be complicated and unpredictable, resulting in a high risk for failure. In addition, a successful short sale transaction could take up to 5 months. It's important to use a Real Estate Broker with experience and training. I received my SFR (Short Sale & Foreclosure) designation in 2009, and stand ready to walk you through the process!


Free Home Buyer Kit

"The Pathway to Your New Home - A Road Map of the Home Buying Process" includes a home shopping checklist along with information on pre-approval, low-down payment options, closing costs, and more.

 









Roberta Williams-Lock

Principal Broker
PO Box 80883
Portland OR, 97280

 

 

503-709-4321