We recently received an email from a consumer stating that it was unethical to list a short sale without clearly writing “Short Sale” on the front yard sign. Upon review of the listing, everything was properly marked in the MLS indicating that yes, indeed, the subject property was a short sale and nothing sly or unethical had been done.
I’m less concerned about the accusations, and more about the consumers negativity towards short sales. How could the prospect of considering a short sale be so damaging to a buyer that it would be unethical for me not to put “I’m a Short Sale” in lights?
We market a lot of short sales in the Spokane area, many of which are great values for consumers. The main advantage being that a Short Sale is sold at or below actual market value without regard to what is owed on the property.
I’ll admit that short sales aren’t for the gotta-have-it-now buyer, but a buyer with some time (30-60 days minimum) to wait, can really score big buying a Short Sale.
Here’s what a short sale really means to a buyer:
- Longer escrow period – we’ve all heard horror stories, but for the most part they are 60-12o days of escrow. Working with a buyer’s agent who is skilled and versed in short sale transactions is critical.
- Paying over list price – although uncommon, many short sales are done backwards. Find an offer then get a price approved. In many cases to get an offer the price is slightly under where the bank will accept. Don’t be surprised on a well-priced short sale to have a bank request you to pay slightly over the MLS list price as in MANY cases the list price isn’t approved. With new HAFA transactions this is different, ask your qualified buyer’s agent to explain.
- Doing some work for financing – Short Sellers are usually financially distraught. In fact, they have to show a negative monthly cash flow in many cases to qualify. They do not have extra funds to make minor repairs on the home, if financing issues arise, budget for a few hundred bucks to fix minor issues. If you have a great agent, you’re making it up in equity anyway.
Overall Short Sales can be a great way to buy a home. They do require prior planning and an agent who knows what they are doing. If you have questions, comment below or call us at (509) 990-7653.