Other than it taking forever to close, is there any good reason to not buy a short sale? Also once I've put it under contract how long should I expect to wait for close?
That's why. It takes forever. And you have no idea how long it will take.
I was in the process for 14 months, and didn't end up getting the house.
There are many pros and cons to buying short sale. Time is obviously a major con. As well as whether or not the deal holds out However, a lot of short sales can really help you make a hefty profit.
Depending on your plans for the home, you can get a real gem for way below the value, throw a little work, if none at all into it, then sell it. It is important to know that the main reason these houses are so lowly priced is because 1. the banks do not want to hold on to them and 2. most banks only go after what is left on the former mortgage.
Using your internet and local county clerks records (which are free to the public) you can find out the amount that is owed, any violations or code compliance on the house, and any other information pertinent to your purchase. It is always easier and quicker to purchase a house that is already bank owned. When making an offer on a short sale, you must first ask the homeowner and agent if a short sale was even approved by the bank. That right there is the most important piece of advice. Secondly, find out what that amount is and make an offer no less than 85% of the price, unless there is MAJOR damage. You will need an inspection report to go along with your offer. Since the homeowner is not obligated to fix any problems with a home when it is a short sale, you can have room with the bank to negotiate those major repairs.
Do your homework and you should have good luck buying short sale!
Two of the last three houses I bought were short sales. They took 2.5 months and 3.5 months to close. Not too terribly long considering they were short sales, but longer than a typical traditional sale. They can take much longer though. So I wouldn't avoid them, but just be aware that they can potentially take a long time to close. In my case, I was planning to rehab and hold them as long-term rentals so time wasn't a huge deal.
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