It all depends.... With the tax credit for first time buyers due to expire soon the question looms; Is a Short Sale worth the look? One thing you need to ask yourself is can I wait? Unfortunately right now with the influx of short sales on the market with the economy struggling to get out of a recession and home values plummeting to historic lows in comparison to a few years ago banks are over run with short sales.
I read an article recently that stated Mecklenburg County is the largest area in North Carolina for foreclosures pending. That means record levels of people are attempting to sell their home via a short sale to avoid foreclosure. Typically, with a short sale your response time can be anywhere from three weeks to months depending on the bank. Some banks will work with you and counter your offer. Other banks will just say no. Then if you want to increase your offer you are going through the process all over again. I have dealt with both buyers and sellers on Short Sales. I have had some great luck with them and some horrific luck right now. I was blessed on one of my listings that the bank ordered a BPO(Broker Price Opinion) upfront and when an offer came in i was able to have an answer back within forty eight hours and within five days had the deal negotiated and approved by the bank. On the other end, I have a buyer who has an offer in on a home in Charlotte right now that we are still waiting for the bank to respond....it has been 5 MONTHS. If you are looking to take advantage of the tax credit and need to be under contract by April 30, 2010 have your agent check with the listing agent before you put in an offer to see where in the process they are and who the bank is. Generally speaking, most agents should know based on the bank what the response time should be on average.
Are there deals to be found out there right now...definitely. I know in the Charlotte area buyers are having a lot of choices and good deals are found in just about every price range. I just warn my buyers up front. if you are looking at a short sale and thinking of putting an offer in; here are the possible ramifications of waiting. I give them the information and let them decide what is best suited for their needs.
Now it does not mean that if I put an offer in on a short sale I cannot stop looking. I advise my clients to continue to look at properties just in case. you just never know what might come on the market in that time frame as well. I will continue to send listings to them that meet the criteria they desire and show homes to them that they want to look at while we wait for an answer. The potential of losing the $8000.00 tax credit is large. I always advise my clients to have a plan B in place just in case.
Also, while you are waiting for a response back from the bank another offer may come in. The other offer could be better than yours or worse. The bank may negotiate with both of you or just one of you. Unfortunately, until the bank accepts your offer or negotiates a deal that you both accept anything can happen. Just because you are the first offer does not mean you ahve first right to the home. too many times when I explain this to first time buyers in the Charlotte area they have a stunned look. They never realize that they could have an offer pending with a bank for weeks or months and someone else can come in at the last moment and put a better offer in and they are out.
As we get closer to the deadline to be under contract, that window of waiting becomes smaller. As of the writing of this post you have only 65 days to be under contract on a home to qualify for the tax credit. You do not have to close to July 1, 2010 but need to be in agreement on the purchase of a home by April 30, 2010. So, do your due diligence and consider the short sale but make sure you know how long you may be waiting for a response back from the bank.
Dave diCecco
Realtor/Agent
www.davedicecco.com
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