Short Sale Tips?

Question

Hi all! @Max Ockner and I are working on purchasing a 3-2 home for a live in flip, and just found out today that it's in short sale. We were wondering what advice people might have, and any questions we should be sure to ask. It's our first property, so we want to be as prepared as possible!

Stephanie Birkhimer · Answer

@Derek Tyler Thank you! That was very clear, I'll be asking the listing agent right away.

Stephanie Birkhimer · Answer

@Derek Tyler We have some time. Our current apartment lease ends in July, so it seems like the timing might be perfect. The realtor did say that she's seen short sales close in as little as 15 days though, so we're trying to be prepared for any length of time.

Derek T. · Answer

No when the banks are selling the house via a short sale it means that they will accept less than want the note is on the house (they'll take a loss on the house). When agents start the process and list the house, they choose a number based on what the comps are in the area.  The bank may accept that price or may not (this process takes a long time for most banks). A short sale that is already approved means the bank has already approved to sell the house for the list price that the realtor is listing it for.  This drastically speeds up the process. If it isn't already approved it could take over a year if it is already approved it should be 45-60 days to close.

Derek T. · Answer

Is the short sale already approved by the bank?  I would want it to already be approved if it were to be my personal residence (flips I'm okay waiting on if not).

Elizabeth Colegrove · Answer

We had done very well with short sales. They are actually my favorite, Here is a blog post I wrote on the subject.

http://www.biggerpockets.com/renewsblog/2014/11/17...

Jon Huber · Answer

@Stephanie Birkhimer If I can tell you anything, it would be to have patience. Have as much patience as you can. It will take a minimum of 3-4 months and can take years. I wouldn't put any down until you get an approval from the bank. I had a down payment tied up for 6 months, and then the bank denied my offer. It was a long drawn out process, that didn't get me a property, and tied up my funds. Lesson learned.