What are the Pitfalls of Buying a Short Sale?
That is an interesting question. There can always be issues involved with a shorts sale. However there can be issues involved with any purchase of real estate. It is a matter of keeping these issues in perspective. The savings you can achieve often offset any issues that might arise.

The time frame is an issue for many buyers. There is some uncertainty as to when the bank will actually approve the offer, as it does take some time to pass through the bank’s “system.” For this reason, buyers should be prepared to wait, and have a plan “b” if the anticipated closing date is delayed. If you must given notice on an apartment, you should see if you can rent month to month. Or, if the closing is looming on the property you have already sold, then you should be prepared to find an interim solution.

Another common frustration with short sales is figuring out how to handle contingencies. Most buyers are hesitant to do a home inspection on a property when they have not yet received an “official” acceptance from the bank. So, if they do the inspection early, the bank may not approve their offer and they did an inspection on a house they are not getting, or…on the other hand, if they wait, they may have a short window of time to execute an inspection, and then find out the house has defects the purchaser is unwilling to fix on their own. Remember, most short sales are as is”; the bank most usually does NOT do any repairs.

It’s important for short sale buyers to have a good understanding of the process and how it works. Once you are prepared to handle the common issues, however, it helps to remember the old adage, that “good things come to those who wait!”

Posted By: Teresa Cline on Wednesday, October 28, 2009