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Short Sale Waiting Game Proves Frustrating
Dear Phyllis,
In November, I made an offer on a short sale. The home was listed for $819,000. I bid full price and the seller accepted. I spent $375 to hire an inspector and paid another $450 for an appraisal.
Then I waited, and waited, and waited. Last week, my real estate agent informed me that the bank countered my offer at $895,000. I can’t afford that much, so I countered at my maximum, $825,000. My offer was rejected, and the home is now in escrow with someone else. Frustrated with the short-sale waiting game.
Dear Frustrated,
I certainly share your disappointment. This process can feel very frustrating. A client often calls me excited about a home with an unusually low asking price. Then we discover it is a short sale and subject to lender approval on price and terms.
Some agents intentionally price short sales very low to attract offers. They then submit those offers to the bank and wait for approval on pricing. As a result, the first buyer often becomes the “test case” while the lender decides what the home is actually worth.
When I represent a buyer in a short sale, I take a cautious approach. I write the purchase contract so the buyer does not begin inspections until the lender approves the short sale. I also advise clients to move forward with loan approval and credit review. However, I recommend delaying the appraisal until after lender approval.
By doing this, buyers can avoid unnecessary costs. In many cases, this can save more than $700 on a failed transaction.
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