Up until recently I’ve always ignored all the short sale real estate listings in my area. I’ve had this assumption that short sales never actually get completed and that it takes many months of hassle to even find out it didn’t go through. In the past, I’d seen a number of friends try to buy short sales and not one of them were ever successful. Things seem to be changing though. I recently read that banks are working harder to support short sales because they are finding that they actually receive a higher amount of money for the property via a short sale than they do if they push the house through the foreclosure process. The banks also save a ton of money by avoiding the foreclosure process and the homeowners tend to take better care of the house when it’s going through a short sale process.
A couple months ago I was talking to some friends of ours and they told me how they had just completed the purchase of a rental property in the neighborhood. I was shocked to find out that they bought it through the short sale process and it only took 30 days to close from the day they submitted their offer. They encouraged me to check out short sales because the prices were great and they said the bank was very accommodating. Of course, this isn’t going to be the case in all situations because there are still plenty of banks that are following the traditional path of foreclosing, letting the house sit there and rot, watching the value decrease and then selling for an even lower price than they would have gotten if they had supported the short sale in the first place. (Geez, did that sound cynical?).
Anyway, if you are thinking about buying a house, check with your realtor to get all the information you can about specific short sale listings. Some times they will actually tell you if the banks are cooperating and in some cases the price listed may have been preapproved by the bank for a fast closing.