Taking Down First Short Sale - What Am I Missing?

[Steven Aponte]

Hello BP'ers!

Today I sell my depreciating asset (my car) to free up some funds and hopefully acquire a new income producing asset. So naturally, last night I was searching for homes to BRRRR. I stumbled onto one in an area I already invest in, at a price I can take down myself (no financing). The initial math pencils out for either a BRRRR or even an BR-AirBNB-RR (see what I did there?). The issue for me is: It's a short sale. Actually, I'd be taking over for a buyer who is backing out of his approved offer in the last 24 hours. He strung along the seller and bank and now there's only a week to close. Title is cleared already.

I've never done a short - and certainly not in 5 days! What should I look for, besides a physical walk through, clean title, and the normal property purchase math? Can past due HOA's come back to haunt me? Water/Sewer? Back taxes? I'd expect those all to show up as liens, but if they weren't filed yet, couldn't I get caught holding the bag?

I am skeptical of unicorns... What am I missing?

[Brett Goldsmith]

Typically taking over for a buyer isn't something that takes place in short sales.

Almost all short sales are approved and buyer specific so a buyer change with the servicer is likely needed so a new approval letter would be needed and 5 days does not seem realistic at all. A buyer change could take a week or more, it just depends on many factors. 

If the approval letter isn't buyer specific then that'd be another story but this is very uncommon. Any large servicer will require a new review and approval letter if a buyer switch happens. 

A short sale is like any other transaction. You expect clear title and that any delinquent items would be required to be resolved in order for a transaction to close.