Part 2: What Are Some Of Your Risks With a Short Sale?
It is important to know what the risks are before entering into a contract for property that is a short sale in Atlanta, Virginia Highland, Buckhead or Snellville. Some of those risks are
1. It is important that you are patient. I already discussed that it could take 2-4 months or longer to get a decision if your offer is accepted. You will then have another 30-45 days for the loan to be processed, in most cases. If you have to be out of an apartment and need to be in your next home at a specified time, a short sale is not the way to go.
2. You need to make sure your financing is in order. Cash is always king. Lenders like to have cash buyers that have no contingencies on the offer. You need to be pre-approved for a loan and know that your lender can close on the loan in the specfied time period. Lenders like to know they are getting paid and what day “payday” will be.
3. If your offer is contingent on your home selling, the lender will probably reject it right away. Lenders like to know you can be flexible on the closing date.
4. Understand that a lender may decide not to do any repairs or provide any repair credit. I always tell buyers that a home is worth what they are willing to pay for it and not a penny more. Recently I had a buyer that was very interested in a short sale that was destroyed with light fixtures and cabinets removed. They wer
e not willing to repair the property, nor were they willing to reduce the price. They would make no concessions to the buyer and the property needed extensive work. They were selling it as a short sale. The property is now in the process of foreclosure. They could not get a buyer to pay the price they wanted in the condition the property was in.
5. You might get a broken heart. Don’t fall in love with a property too quickly. You might be very patient and wait 5 months for an answer to your offer, only to find out it is rejected. Short sales are not for the tender hearted.
