I'll be the first to admit that short sales can be a pain in the ass. They can take a long time and you need to have the right mental attitude. Surely you don't want to be going after a short sale today if you absolutely have to have that tax credit that expires at the end of this month.
But short sales can also be really good deals. Unfortunately, I suspect that for most realtors the pain in the ass factor is overwhelming the good deal factor and the realtors are discouraging their buyers from pursuing short sales. How do I know this? Well, as a listing agent for some short sales I've gotten some strange questions from buyers' agents that suggest that the agent is really worried about the short sale process and/or has had or heard of some really bad experiences. Furthermore, I don't know how else to explain listings that get disproportionately low showings, given the high level of interest from buyers on the MLS.
The bottom line on this one is that not all short sales are created equal and your realtor should not be painting them all with the same broad brush. For starters, you need to decide which short sales you are going to pursue. There are a lot out there so you can spend a ton of time sifting through the garbage. You need a quick filter. Personally, I look for short sales in neighborhoods where short sales are the exception and where I can see a picture of the place online. Usually, but not always, no pictures means that they are hiding something scary.
A lot also depends on how competent the listing agent is - and your agent should be able to discern the competence of the listing agent. There are clues:
- Is the listing agent articulate, smart, proactive, and responsive? (Hmmm. I guess this rules out most short sales.)
- Has the listing agent done a short sale before?
- Does the listing agent know the bank's short sale process?
- Where is the listing in the short sale process and who is the bank contact?
- Does the listing agent have an estimate of how long it's going to take to get a response from the bank?
- Are there any extenuating circumstances that will slow down the approval?
With the right answers to these questions you should be jumping on these short sale opportunities - not running from them.
Posted at 4:53 PM as an afterthought:
I almost forgot about the new HAFA rules that took effect on Monday that will streamline the short sale process and also provide financial incentives for both lenders and sellers. All the more reason to pursue a short sale.