Yesterday I wrote a little bit about Foreclosures here on Whidbey Island. Foreclosures are attractive to buyers because they typically sell for well below the average price of other homes on the market. But many buyers don’t have the money available to do the repairs that foreclosed homes often need.
Short Sales are an attractive alternative to Foreclosures. In many cases the homes are in excellent condition, and will easily be eligible for financing, including FHA or VA financing. If you don’t have the cash available to fix up a Foreclosure, buying a good condition Short Sale is a great option. And prices are still very good; this year on Whidbey Island Short Sales have sold for an average price 22% below other comparable homes!
A Short Sale is a property sale where the buyer pays less for the property than the seller owes their mortgage holder (when the seller is unable to make up the difference in cash). Since the seller’s bank is coming up “short”, the bank has to approve the Short Sale, which can be a time-consuming process in most cases. The last Short Sale I did took 8 months from contract to closing! In some rare cases a Short Sale may already be approved by the bank, in which case the closing can happen much more rapidly, often in less than 30 days (30-45 days is our normal time from contract to closing on Whidbey Island).
Short Sales make up almost 10% of active listings For Sale here on Whidbey Island, but account for less than 5% of the homes Sold so far this year. If you have the time to wait out the process, or can find a Short Sale where the bank has already approved the sale price, you may find yourself a move-in ready home at a bargain price with built-in equity. For more information on Short Sales around Whidbey Island, you might want to check out the Whidbey Island Short Sale Blog.