Market Wise Q&A: Short Sales Offers Buyers Challenges
Pat Kapowich for the San Jose Mercury News Q: Twice we have waited weeks for Lenders to approve our Short-Sale purchase offers only to learn through our inspectors that the homes were not in the good condition they were purported to be. Each time we had to cancel our transaction since the distressed sellers and their banks made it clear no repairs were forthcoming. We literally lost a total of over three months waiting, plus the cost of inspections. All that our agent has to say is “third time’s a charm.” Since most of the listings in our price range are Short-Sales, what can we as Buyers do to improve our chances and reduce the time and money wasted on this protracted process?
A: As a Buyer, you shouldn’t wait for formal lender approval of your Short-Sale purchase offer to inspect the property. The following is yet another example of how inspections pay for themselves in more ways than one: Once the Buyers and the Sellers have ratified a contract, the property is listed as a Pending Sale on the MLS and the offer is forwarded to the bank(s) for lender approval. There can also be prolonged negotiations behind the scenes. That’s the time you, as a buyer, should hire an accredited Home Inspector and accompany them while he or she inspects the property. Investing hundreds of dollars and a few hours with an inspection this early in the Short Sale process could save you valuable time over weeks and months. More importantly, you can submit the inspection(s) upfront in the negotiations with the Seller’s lender(s) via the agents involved in your sale. This is the optimum time to ask for and receive any concessions for deferred maintenance. This gambit should issued while the negotiations are in the forming stages. Waiting until the protracted Short Sale negotiations have concluded to ask for repair concessions, as a last course of action, is usually a dead-end road.
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