Short sales are bargains, but they take forever?

Back in February, I was interviewed by Lisa Gibbs of CNN / Money Magazine for a feature she was working on about buying a distressed home. I did two one hour interviews and several email exchanges with Lisa, and while I only have a small quote in the finished article, a lot of the material is right in line with what I said and provided. In general, the article is very well research and presented, and gets to the fine points of the process, without the hysteria that fills many articles of this genre. Click here to read the full article.

Then yesterday, Lisa did a blog post on More Money blog titled "Short sales are bargains, but they take forever." Lisa did a good job summarizing a lot of the frustrations that buyers experience when trying to purchase a short sale. Click here to read the blog post.

So, what IS a buyer to do, if they are seeing some attractive homes that are short sales, but are not sure if they are really closeable? As is usually the case, some interesting discussions are developing in the Comments section of the blog, and below is my contribution in an attempt to provide some advice to any prospective buyers:

As I mentioned when you interviewed me for the original article, I believe that every short sale is different, and the underlying reasons why the banks act the way that they do may never be truly known. That said, I believe there are two fundamental "check points" that must be passed, in order for a short sale to some assurance of a success:

1. Qualified Seller, and
2. Qualified Listing Agent. 

Unfortunately, there are never any guarantees of success, but at least we can improve our chances.

It is the Listing Agent's job to help qualify the Seller. Not every Seller is a short sale Seller - some are better off pursuing other options. Which leads to the second point - not every Listing Agent is qualified to do a short sale (or knows how to properly do one).

In your situation, why is the Buyer's Agent speaking with the bank? That's clearly the job of the Listing Agent (representing their Client)! What are they doing, and why weren’t they ready with the package when you presented your offer? Just knowing that leads me to believe that either one, or BOTH of the check points I mention above were not ever passed.

I hope it’s OK to share a link, but I recently wrote a brief blog post on buying short sales and I hope it helps others who are considering buying one:  http://azsse.blogspot.com/2011/04/buying-short-sale.html

The main point is – as a Buyer (or Seller, or Agent) educate yourself on the process, and work only with people who GET it. Our team has closed hundreds of short sales in the Phoenix area market, and I have taught thousands of agents on the process of doing so. Trust me – not all short sales are created equal.