I Want To Buy
“I want to buy a short sale because I have heard I can buy them below market.”
Well, in most cases you can. But there is so much more to learn here.
When you buy a short sale you had better be prepared for the following;
- Short sales can take time…a long time
- Many short sales will need quite a bit of repairs and updating
- Short sale banks can be “quirky”
- You, the buyer, had better be flexible
- Buying a short sale can be very, very profitable
For the right home buyer buying a short sale can be an economic treasure trove. Someone else’s misfortunes and bad luck can actually help you to better your economic situation. But it takes quite a bit of knowledge, patience and professional help to go through the process. Let’s take the items listed above one by one.
Short Sales Can Take Time…A Long Time
We have been directly involved with short sales that didn’t close until ten full months past the original acceptance of the contract. We had another deal that we had made an offer on and received no response, despite numerous follow-ups, for 63 days. Then, on a Tuesday afternoon, we received a call saying that if the buyers could close Thursday by 5:00 pm they would accept the deal. That’s basically 36 hours notice!!!! (The buyer did jump on it because it was a cash situation. But seriously, 36 hours?)
We’ve had clients sell their home and have to live in a hotel for two weeks because the short sale they were buying got delayed and delayed. And we’ve had clients that ended up having to rent townhouses on a month to month basis because the short sale they were under contract with had no predetermined acceptance date.
And we’ve had short sale deals fall through after months and months of patience by the buyer and sellers.
If you are the kind of person who needs structure and stability and must have deadlines you are not going to do well in the short sale home buying process. Fair warning.
And the best part? You can call us every day and kick and scream and demand answers and most days we just are not going to have them. Asset managers work 9-5 and take as much time of as they can. They don’t know you, or us or the sellers. They don’t care. It’s a file to them. It will get done when it gets done. They will call or email or update when they get to it. Oh, we’ll keep bothering them. But we may not have helpful updates.
Many Short Sales Will Need Quite A Bit of Repairs and Updating
This just makes sense, right? If someone had an economic change in their life to the extent they were no longer able to make their mortgage payments on time it’s highly doubtful they are going to prioritize painting, roofing, landscaping, fixing leaky sinks, etc. Would you? They are just trying to do the best they can.
As the buyer of a short sale it will be up to you to bring the home up to your living standards.
Banks Can Be “Quirky”
Just re-read the Short Sales Can Take Time…A Long Time to see what we’re talking about. But think about it. The whole “short sale” business came from just about nowhere a couple years back to nearly 40% of the transactions in some areas of the country. I’ve been a huge, huge critic of Bank of America’s handling of short sales to the point where I wouldn’t touch one for about 18 months.
But with time comes streamlining. The banks are still not giving houses away. Nor should they. But they are beginning to get their systems in place to deal with what is in front of us.
You, The
Buyer, Have To Be Very Flexible
Again, the first section titled Short Sales Can Take Time… A Long Time should be able to tell you most of what you need. But you can get hit with variables from left field.
Short sale home sellers can be desperate and have a “no longer care” attitude by the time the short sale is nearly complete. You, the home buyer, may think you are closing on Tuesday but the home sellers have their kid’s baseball game that evening and won’t be able to be out so they aren’t going to close the property until Wednesday and they ‘ll be out on Thursday…or maybe Friday.
Think that’s funny? It’s happened to a client of mine. Never mind the rental moving truck already loaded up and school starting in less than a week. You can gripe. You can moan. You can do all sorts of things. But after having invested so much time and with the possibility of all that equity mining what are you really going to do? What can you do? We can make phone calls but we aren’t a sheriff’s department. And to get the sheriff to make them move will take months of legal haggling. Get it?
Buying A Short Sale Can Be Very, Very Profitable
Yes. You can make some serious cake on the right short sale purchase. But not every short sale is a profitable move. We are here to help with that process of deciding which Kansas short sale property is profitable and which ones are not.
We’ve had clients purchase a short sale, spend the money to update and repair and have additional equity positions (on top of what they put in to their down payment and updates) of amounts up to $35,000. Equity mining. It can be a very, very good thing. On a $275,000 house an additional $35,000 of mined equity is 12.7% of the homes value. Yes!
Still think buying a short sale is for you?
Contact Us Today To Buy a Kansas Short Sale
Chris Lengquist & Associates
Keller Williams Realty
Diamond Partners, Inc
Olathe, KS
913.322.7515
