The Buyer’s Experience: An Atypical Short Sale

• June 9, 2011
• 5 Comments

by Mark Wellborn

In a new feature debuting today on UrbanTurf, home buyers and sellers tell the good, the bad, the ugly and the weird associated with their home buying or selling experience. In the first installment, 25 year-old Izzat Ansari dispells the notion that all short sale transactions lead to headaches.

The Aurora

Despite the problems that I had heard are associated with the short sale buying process, my transaction went pretty smoothly.

On May 19th, I went under contract on a two-bedroom, two-bath, 1,025 square-foot condo in The Aurora in Silver Spring. The listing price was $250,000 and the accepted offer was $249,990 with the seller paying three percent toward closing costs. That breaks out to about $244 a square foot, whereas the average in downtown Silver Spring was $277.

My budget was $250,000 and there wasn’t much inventory in the area at this price point that excited me. I work in Bethesda, so I wanted something that was close and Silver Spring made sense. Given my modest budget, I wanted to focus on distressed properties, and my real estate agent advised me that dealing with a foreclosure was easier than dealing with a short sale.

(With a foreclosure, the buyer negotiates with the bank directly; with a short sale, you negotiate a price with the previous owner and then that price has to be approved by the bank.)

In my situation, the bank and the seller had agreed on a price of $250,000 for the unit. My offer (see above) was accepted by the seller within three days of it being submitted, but my agent told me that it often takes months for a bank to review a short sale, and in the case of my condo, two liens needed to be approved by the bank.

To my surprise, they approved the first lien on the condo within about three weeks. There was a second lien on the condo and that took about another ten days to get accepted. All in all, it took about a month for the sale to be approved, a relatively quick transaction period by short-sale standards.

The property was sold “as is” and there were some problems that were found during the home inspection (e.g. the microwave needed to be replaced, the A/C unit needs to be serviced and might have a leak). I was hoping that since the building is only six years old there wouldn’t be any problems, but I guess that was wishful thinking.

While I know all short sale experiences are not this smooth, I’d absolutely go through the process again. If buyers have some patience, they can get a pretty good deal.

If you have a good, bad, crazy or weird buying or selling experience that you deem worthy of sharing with the UT audience, send an email to .(JavaScript must be enabled to view this email address).

This article originally published at https://dc.urbanturf.com/articles/blog/the_buyers_experience_an_atypical_short_sale/3624

5 Comments

1. Juliet said at 8:23 pm on Thursday June 9, 2011:
   Factors that can expedite a short sale include if the seller has gotten pretty far in the process of working with their mortgage lender documenting their hardship and inability to make their payments, and a listing agent has provided the bank with a bpo (broker's price opinion) accepted by the bank showing that the value of the property is below what is owed, so that the lender will likely accept less than the outstanding mortgage balance. If the seller hasn't begun that process, or if the lender(s) are overwhelmed and not adequately staffed, the buyer is in for a very long and likely frustrating experience. Izzat stepped in at the perfect time -- sounds like the short sale process was well underway when the 1st buyer fell out because they couldn't get financing. Congrats Izzat!

1. Jen Angotti said at 3:03 pm on Thursday June 9, 2011:
   In my opinion, your short sale experience (whether it's good or bad) depends on who's holding the loans. In the short sales I've worked on, if a smaller bank is holding the loans, they're motivated to complete the deal in a realistic time line. They want it off their books. Big banks are more problematic in my experience. Every short sale I've worked with that didn't close or had multiple problems was with a big name bank.

1. Izzat Ansari said at 4:17 pm on Thursday June 9, 2011:
   Hey thanks, for the congrats. I think if the comps suggest that your offer is warranted, then the bank should seriously consider it. I didn't have a tight timeline to buy a place so I was fine looking at short sales (and was prepared to have to wait). It worked out as a bonus for me because interest rates continued to drop! Downtown SS where I was looking had lots of distressed properties but I found that they were getting offers and moving kind of quickly. My condo that I bought actually was under contract and the financing fell through so I scooped in. I was ready to put an offer on another unit that was priced 20k more but this came open. My advice is be diligent in your search and listen to your realtor. There isn't a ton of distressed inventory out there, but it is out there. Best of luck!

1. First Time Home Buyer said at 1:08 pm on Thursday June 9, 2011:
   I just put an offer on a short sale yesterday. I offered 30K less than the listing price but the comps supported the offer. I think the seller will be fine with it I just hope it gets past the bank. This post is encouraging. I would hate for the summer to get away while I'm waiting on this home only to find that the bank won't accept it and I'm right back in the market in the fall.

1. Bob said at 1:37 pm on Thursday June 9, 2011:
   Congrats, Izzat! I am in the market and am looking at regular for-sale properties as well as short sales. Encouraging to hear that your process went as smoothly as it did, even with two liens to be approved.