Buying an Oakland County MI Short Sale Listing- What to Expect
Between what I’ve heard on TV and radio, read and from conversations I’ve had with clients, potential clients, other agents, relatives, friends… I have learned that there are a whole host of definitions for the term “short sale.” And most of them not very accurate.
A short sale is when the house is offered for sale by the owner (person as opposed to a bank) who owes more than what the house is worth and can’t, or isn’t willing to, pay the difference themselves. Any offer that home owner would accept would be subject to the bank agreeing to reduce the mortgage payoff. Selling short. Short sale.
Short sale listings can be some of the best bargains available in Oakland County Michigan, but there are things about short sales that the Oakland County Michigan home buyer should be aware of prior to even looking at houses.
- Be prepared to wait 3-6 months (sometimes longer) for short sale approval
- Be aware the lien holders may not agree to the payoff required to proceed with your offer. After 3-6+ months your offer may be countered or outright rejected
- Don’t expect appliances to stay
- Don’t expect the seller to pay for repairs
- Don’t expect your closing costs to be covered in the form of seller concessions- sometimes they’re capped at 3% and sometimes they won’t be covered at all
- DO expect to close pretty quickly once the short sale is approved
One of the first things everybody involved in a short sale needs to understand is that the banks are under no obligation to approve a short sale. You would think it would be in the banks best interest to approve a short sale when the offer is reasonable, but often times the actions of many of these banks seem to defy logic. Also, the more lien holders involved in the transaction the more difficult it is to complete and the higher the probability that it won’t close.
Buyers need to realize that there are factors beyond the control of the buyer or buyer’s agent.
- We can’t control how cooperative the seller will be with the bank’s demands addressed in more detail here
- We can’t control how knowledgeable or diligent the listing agent is
- We don’t know from day-to-day what financial incentives the government will offer the banks which can determine what short sales they approve
- When there are multiple mortgages we don’t know how well the negotiators for the first and the second will play together or the abilities of the listing agent to ref them
- The seller can also reject the terms of the short sale which will be addressed in detail in another article
In a nut shell- short sales can be a good bargain but for the right buyer. You need to have the patience of a saint and the ability to move on someone else’s schedule.
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Jackie Hawley
Keller Williams Realty
Cell: (248) 736-6407
Email: Jackie@JackieHawley.com
www.MiRelocation.com
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