by Ben Puchalski
on Thursday, February 9th, 2012 at 10:33am.
Petworth short sales are a great opportunity for homeowners and investors to buy property at a discount but the risks need to be understood. The biggest risk with purchasing a short sale is the time that it takes to go to settlement. The time that it takes to close a short sale can easily exceed 90 days from the time the seller accepts your offer. Buyers that are on a time crunch may not be able to purchase a short sale because of this. If you need to move by a specific date, then you should consider a regular sale or perhaps a foreclosure. A foreclosure sale can also have delays which are usually related to title.
There are 15 Petworth short sales currently on the market. The price range of these properties is from $75,000 to $425,000. There are 28 homes in Petworth that are currently under contract that were listed as short sales. In 2011 29 short sale listings were sold in Petworth.
A successful purchase of a Petworth short sale depends a lot on how good the listing agents communication is with the sellers lender(s) and how forthcoming the seller is with their financial information. They need to provide a lot of information to the bank so that the bank can see that the seller can no longer afford to pay for his/her Petworth home. A seller that is attempting to complete a short sale needs to submit documents like a hardship letter, w2's, tax returns and bank statements. A Petworth short sale where the seller has multiple loans can be more challenging then if a home has only one single loan. If the seller has a second loan on the property it can be challenging to negotiate with that second lien holder. In a foreclosure the secondary loan gets wiped out and receives nothing from the sale. The sellers lender will do their due diligence to make sure that the offer amount you made is an accurate one for the market value of the home. To do this they will do a broker price opinion also known as a BPO or an appraisal or both.
A good buyers agent will put forth the time and effort to get information from the listing agent before even showing you the property. After all, what would be the point of making an offer on house that may never get approved as a Petworth short sale.