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Are short sales a good deal?

Lately we’ve had many buyers asking to see short sales, because they’ve read so much about what bargains they are. We caution them that in our experience, though we’ve had several short sale “contracts” accepted by sellers, we have had none that actually closed. Any contract will be subject to acceptance by the lender – and if there are additional mortgages, a home equity loan, or a business loan secured by the home, the issues increase significantly and the likelihood of a closing diminishes.

Often the buyer will be waiting two or three MONTHS before the bank gives an answer, and all the while the lender will be accepting offers from other potential buyers. Add to this that the process is handled differently by different lenders and different listing agents.

The fact that a property is listed in the Multiple Listing System at a particular price is NOT an assurance that the lender will accept even a full price offer.

Today the Wall St Journal published an informative article entitled The Brighter Side of Housing. Here’s a quote that succinctly addresses short sales:

“Homeowners hoping to do a short sale sometimes advertise very low asking prices to lure buyers, even if there is little chance the lender would accept bids at that level, Mr. Odio says. The “fictional” asking price, in turn, misleads potential buyers about the value of nearby homes.”

Contact The Simms Team to learn how you might be able to find better opportunities for bargains.

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