What to expect in purchasing a short sale SFR?

5 Replies

Im looking at a short sale SFR that i wouldn't mind purchasing. Im purchasing with cash but am short a few thousand of asking price. I don't feel the asking price is bad but would like to offer what I can afford now and to save a few bucks.

I will be able to afford the regular expected fees that I'm aware of like Title, closing, insurance, and my attorney. With this type of sale what costs am i missing?

How quick is the process of making one of these purchases? I can have more than enough in 45 days. Do I start the process now or hold off until the money is there? Is it ok to offer less or is that not the case when a short sale has a price tag already on it?

Thanks,

Tim

They are usually slow to close.  6 to 9 months isn't unrealistic.  It also depends if the price is already bank approved.  You can find out from the listing agent if any offers have been submitted.  I would also be aware if they are taking back up offers.  If they are, and your offer isn't accepted, you may not get a chance to counter.

I would first start by talking directly with the listing agent to find out if there are any other offers or interest in the property. If there is strong interest or multiple offers, you will need to make a cash deal and go above the asking price to have any chance as the asking price on a short sale is normally discounted. Also, check with the listing agent to make sure the bank had already approved the asking price. Short sales can be a lengthy process and can take anywhere between 3 to 12 months to close, on average.

My wife and I purchased our house through a short sale and worked directly with the listing agent which helped guide us in making a competitive offer. It was a cash deal, above asking price as we found out that there was 10 offers on the table. Fortunately, we came out on top and the deal closed in approximately 4 months. The house was newer and in a very desirable neighborhood, so we knew we had to be aggressive coming in with our offer.

@Timothy Riley,

2 experiences in Chicago and suburbs: one an investment (2 years ago), one personal residence (1 year ago).

2.5 months in north suburbs.

4 months in chicago.

in both cases, banks had pre-approved the listed amount. one wanted to negotiate, the other didn't.

Originally posted by @Timothy Riley :

Im looking at a short sale SFR that i wouldn't mind purchasing. Im purchasing with cash but am short a few thousand of asking price. I don't feel the asking price is bad but would like to offer what I can afford now and to save a few bucks.

I will be able to afford the regular expected fees that I'm aware of like Title, closing, insurance, and my attorney. With this type of sale what costs am i missing?

How quick is the process of making one of these purchases? I can have more than enough in 45 days. Do I start the process now or hold off until the money is there? Is it ok to offer less or is that not the case when a short sale has a price tag already on it?

Thanks,

Tim

 I haven't looked at the latest statistics in Illinois but closing a short sale after an accepted offer can take from 3 to 4 months.  I've seen some as long as 9 months.  I've also seen them close in 30 days if the offer price was already approved by the bank.  It's ok to offer less, but....

I'm curious what your intent is w/ the property.  While you may be able to afford to purchase the property, will you have any reserve?  If it's an investment property you should have a reserve.

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