Here's the short answer:
Some banks will take up to 60 days to get back to you regarding whether your offer has been accepted or not. So, picture this: you fall in love with the house, you submit an offer (perhaps even a full price offer), and the homeowner submits it to the bank for approval.
Then you wait. Months go by and you're still waiting for an answer from the bank. Life is going forward while you're in a holding pattern. Sixty days later, the bank responds to the offer, and instead of accepting it, they reject it or counter at a price that either a) you can't afford or b) doesn't make sense to pay.
So, when is a short sale NOT a good deal?
- When you have children whom you want settled before the school year starts, and time is running out.
- When you have a settlement date on your current home and have no where to go - except temporary housing.
- If you're the type of person who is going to stay up late at night agonizing over this deal.
When does a short sale make sense?
- You're a first time homebuyer and have a flexible lease.
- Your home isn't on the market, and you can afford to move forward without selling your current home.
Also, a little head's up - most times the price listed for a short sale listing has not been approved by the bank. What many REALTORS are doing is pricing the home so that it's a fabulous, once-in-a-lifetime, unbelievable deal. The hope is to get several offers on the table so that they can generate multiple offers and submit the highest to the bank. Because the homeowner isn't getting any money back from the home sale, they don't care how low the home is priced. However, the super low price hasn't been approved by the bank. In reality, you've never been able to purchase the house at that unbelievably low price.