The most important first step when seriously considering buying distressed real estate is to become familiar with the pros and cons of such transactions.
Short sales should NOT be confused with QUICK SALES. Prepare to wait. And wait. And wait. And then wait some more. These transactions can take months to see any progress towards closing. Once you submit an offer, there is no deadline for the lender to respond. And the lender is the decision maker in a short sale situation.
Even if you specify a response date in your offer, lenders are not obliged to act in a timely manner. The acceptance of an offer depends mainly on how much loss the lender is willing to lose, and secondly, the strength of the buyer's offer. Buyers offering list price or higher and paying cash are typically considered more favorably.
Often, short sale transactions are "processed" by yet another party, a for-profit company that specializes in this type of transaction; commonly known as a Loss Mitigator and hired by the listing agent. However, there is virutally no oversight of Loss Mitigation companies, and this does not always make for a smooth process or even speed up the transaction.
Bottom line: First rule of buying short sales = practicing extreme levels of patience. If you are looking for a home you can move into within 30-60 days, short sales are probably not for you.
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