Boston Real Estate and Relocation

Buying a shortsale is a very complicated process.  The reward can be well worth it, but you need to be aware of the risks involved.  First of all, this is not the route to take if you are in a hurry to buy a property or have any specific time line that you must meet.  It is not uncommon to wait 3-5 weeks just to get an answer on your initial offer.  You must have plenty of time a whole lot of patience to make it through one of these transactions.  Many people find the process of buying a shortsale very frustrating since, not only do you feel you are eternally waiting for answers, but the moment the bank decides to proceed with any portion of the sale, they expect the buyer to be ready to jump through hoops to meet a very unequal timetable.  

Don't expect to be able to do too much negotiating on price.  Every dollar lower you try to go represents  a dollar lost to the mortgage holder and they must approve of EVERY step of the transaction.  Keep in mind that in the majority of cases, the bank has agreed to “consider” a shortsale, so even though they are aware of the property's list price, this doesn't mean they will agree to let it sell for that amount.  

Here is an all-to-common scenario:  Buyer makes an offer on a shortsale.  They get it approved by the seller and seller's bank.  Buyer gets financing and is getting ready to close when suddenly, the bank decides that the “market value” of this property is now $30,000. more than the original agreed-upon sale price .  They tell the buyer that if they want the property they will need to bring that extra $30,000 to the closing or the bank will just take it to foreclosure instead of agreeing to the shortsale.  Sound absurd?  It is.  In a “down” market, you can benefit buying one of these, but be careful, especially if the market is seeing any sort of an upswing in prices.