The Unsellables is not just a show on HGTV. I just heard recently that one third of the short sale market is unsellable. Another article suggested it is actually two thirds. Whichever statistic is accurate in your area, it just goes to show that you should enter into a contract with a short sale at your own risk. As a buyer you need to evaluate each short sale and determine if the risk is worth it in the end. Some short sales can take 3-6 months or more. Many short sales involve more than one lienholder – there could be a 2nd mortgage or even a private mortgage insurance company which also has to approve the sale.
Here are a few things to consider before entering into a contract for a short sale:
1. How many lienholders are involved in the sale?
2. What is the status of the property – is this pre-foreclosure, in foreclosure, etc?
3. Has the paperwork already been prepared or submitted?
Your Realtor can help you get this information from the listing agent. In the end, if you feel you are willing to wait for the property – fight for a tight contract. Only one signed contract should be presented to the lien holders.
Be prepared to be patient and understand that there are many short sales that just CANNOT close; so after months of waiting you could end up disappointed or heartbroken. Prepare yourself for the worst and hope for the best!Photo Credit: