Short Sales May Suit Patient First-Time Buyers

First-time home buyers can benefit from short sales because the properties tend to be more affordable. However, they must be willing to participate in a complex transaction that can take as long as nine months to complete; so they work best for buyers who do not need to close within a particular timeline. First-time buyers were involved in 54 percent of short sales in November 2009, but that figure slipped to 40 percent in August 2011, according to the monthly Campbell/Inside Mortgage Finance HousingPlus Tracking Survey. Buyers should work with real estate agents well-versed in the short sale process and experience in their price range. “I always recommend that buyers put in a drop-dead date into their contract, such as allowing the lender 30 days to approve the offer, because this puts pressure on the listing agent,” says Realtor Mike Cuevas of Chicago-based Exit Realty. Buyers also should keep in mind that the listing price of a short sale may already reflect a discount so offers for less may not receive the lender’s approval, and they should understand that these properties are sold as is and may not qualify for FHA financing if repairs are needed. Those with conventional financing and a 5 percent or more down payment are deemed less risky and are more likely to see their offers approved. | Read More