It’s a great market for buyers to get a good price on a property. But right now, that’s about it, especially if you’re dealing with short sales.
When you’re working with a short sale, bring your patience, and also a doormat, because the bank might want to walk all over you. Remember they’re mad! The bank doesn’t care how long you have been waiting or what your personal situation is (unfortunately). And although most times the banks have put themselves in this undesirable position, they are going to take it out on you…all the bank cares about, is whether you will close within their timeframe.
Here’s a good rule of thumb…when the bank provides an approval that matches the contract you’ve submitted. CLOSE AS FAST AS POSSIBLE! Do not dilly dally around…it can bite you in the end.
I’ve seen recent situations where banks have provided their short sale approval letters and for one reason or another, the buyer couldn’t close in a timely fashion. This is an unfavorable situation for a buyer to find themselves and here’s why. The bank’s short sale approval letter has a time limit (cue Mission Impossible theme music and movie trailer).
It’s imperative buyers close within the time limit or it may literally feel like an impossible mission. After the short sale lender’s letter expires, the agreement between the parties and the bank has expired and everything has to be re-negotiated again. So the next step, is to actually go back five steps into the middle of the short sale process. Values will be re-pulled, re-negotiated with the investors on these loans, and the pricing, closing cost concessions or any other term previously agreed to may not transfer into a new agreement. For instance, if a buyer had originally agreed to a $250,000 price, and a comparable sale nearby recently closed at $300,000, the new price the bank might want could be $290,000…which a buyer might not even be approved for. And why would the buyer want to close at $290,000, when they had an agreement to purchase it for $250,000.
This is a real scenario. So if you’re a buyer, be ready to close when the bank wants you to (unless you received so much joy from waiting the past three to six months and want to do it all over again).
Again…CLOSE AS FAST AS POSSIBLE IF YOU DON’T WANT IT TO BE A MISSION IMPOSSIBLE!