After my blog post, “Stop Sacramento Foreclosures,” I got the following question which made me realize I have not said much about buying a short sale listing so here is the question and my answer.

Julie, I have read some of your articles on the Web and am impressed with your knowledge of short sales.  Can you provide me with some info on how one goes about financing a short sale   I’m wondering if the process of qualifying and financing the short sale is any different from a regular real estate transaction?   Thanks for your time and attention to my question.

Here is my answer:

Hi Tom – Thank you for the question and I am sorry I was not available when you called.  I have not written much about the buy side of a short sale in awhile so I appreciate you reminding me about the topic.

Technically, buying  a short sale listing is exactly like buying any other home.  All of the same tasks are involved; qualifying for a loan, inspections, and closing, but the timing is different.  What I ask my buyers when they are considering making an offer on a short sale is, “do you have patience?”  Short sales can take months to complete, and most of that time you will not know if you are actually going to get to buy the house even though the seller has accepted your offer.  It is all up to the lender(s) and how well the request is presented and worked by the listing agent.

I will tell you, the lenders who in the past two years have been swamped with foreclosures and short sale requests are getting their acts together.  Some lenders who took six months from request to approval are now performing in less than 2 months.  They are also faster at pulling the trigger on delinquencies so we are often up against a “foreclosure sale date” when we are working short sales.  All of this makes the process for the buyer more difficult because you don’t know what is happening.

When the lender or lenders finally approve the short sale and subject to your approval of any price changes or conditions the sale proceeds like any other home sale with the inspections, loan contingency period and other standard elements of the purchase agreement and finally the escrow closing and recording of your deed.

From your question it sounds like you are looking to buy a home and want a good deal.  Short Sales can often be a great source for these if you have the patience to wait and understand it may not work out.  I would not rule out REO (bank owned) and active listings.  There is still way too much inventory and sellers who must sell will negotiate price to get it done.

I would be glad to help you find a home if you are not currently working with another agent.

Again, thanks for visiting my website and reading some of my articles.

Julie Jalone

MagnumOne Realty

916 290-9339

I hope this helped explain the process of buying short sale listing.  These can be great deals but they do take more time to complete than buying a non-short sale listing.  Make sure your agent knows enough about short sales to determine if the listing agent has the knowledge and experience it takes to negotiate with the lenders.   More often or not it is the listing agent and how they prepare the short sale request and how they follow-up with the lenders.  This is where experience is so very important.

If you are interested in learning more about short sales, check out two of my articles on the subject, “Six Steps to a Successful Short Sale” and “Short Sale Success.”  These and others are listed on my articles page at www.jalone.com.