Short sales have become somewhat of a controversial topic these days. Some swear by them and have set up thriving niche businesses off of people needing to sell their homes”short” due to the fact that they owe more than their property is worth. Investors are also mixed on short sales. Some find them to be great deals and others stay away and won’t touch one with a ten foot pole. Let’s take a look at the pro’s and cons:
Why Short Sales are an Awesome Opportunity
- Buyers can get a really great deal on a house. Short sale properties typically sell at a deep discount compared to similar homes based on the condition of the property as big as 50% discounts are common.
- Agents can get involved with the lucrative REO market. When lenders foreclose on a property the agent who was working to close a shortsale is in a good position to also obtain the listing with the bank after it takes possession. This will result in a sale at some point in the future.
Why you should stay away from Short Sales
- Dealing with banks is like trying to ride a skateboard while wearing roller skates. It seems like a fun idea but in the end you just end up hurt. I can’t tell you how many agents and investors I’ve talked to that have horror stories about something the bank did to ruin their closing while negotiating a short sale.
- Short sales take forever. One of the most frustrating problems with short sale negotiation is the fact that you have no control over the bank and their short sale representatives are notoriously famous for being unprofessional as they seem to enjoy making your life as difficult as possible when ironically you are helping them.