Short Sales: the Good, the Bad and the Ugly

[Justin Pingston]

I am curious about everyone’s thoughts on short sales. I am looking at an apartment complex that is a short sale, surely there are plenty of pro’s and con’s to a short sale. Perhaps more con’s than pro’s (or maybe Vice versa).

[Ron S.]

All depends on what side of the deal you are on.

Buyer pro's; 

*They can get a good deal

Buyer con's; 

*They can sit for months due to ineptness of other parties out of their control, or due to their own ineptness or lack of reality or understanding of the process

*They aren't going to get the seller to pay for closing costs, carpet allowances, roof credit, etc.

Seller pro's; 

*They can get out of the loan without a foreclosure

*In some states, they are prohibited from making a contribution to the short sale and/or the lender is prohibited from applying any deficiency back to the seller

Seller con's; 

*They can sit for months due to the ineptness of other parties out of their control, or due to their own ineptness or lack of reality or understanding or understanding of the process

*They have a short sale on their credit and get all miffed when they finally realize its almost as much of a hit on their credit as a foreclosure is

Lender pro's;

* They get to dispose of an asset quicker and cheaper than going through foreclosure

Lender Con's;

*They can sit for months due to the ineptness of other parties out of their control, or due to their own ineptness or lack of reality or understanding or understanding of the process

Agent Pro's;

*They get to help out a buyer/seller

*They get to earn a full commission

*They get to be noticed by a lender when they are competent for future deals (i.e. REO's)

Agent Con's;

*They can sit for months due to the ineptness of other parties out of their control, or due to their own ineptness or lack of reality or understanding or understanding of the process

*They typically have to cut their commission to make the deal work, and they get pissed about it and insist on earning 100% of their commission, not realizing that their unwillingness to compromise usually nets them 100% of nothing.

I'm sure there is more.

[Richard Loniewski]

If it's done right, it can work. No doubt about it it takes time but the key for me is having someone who is very knowledgeable with short sales and the bank to negotiate on behalf of the seller. He created a package for the bank and got the SS approved in a few months (all I did was wait), the few I did without him took forever. Make sure you learn as much as you can about the process.