Many sellers and buyers ask me if a short-sale is the way to go whether it's to "get out" of their current mortgage/property or when buying a property in order to "get a great deal". There are lots of issues with short-sales whether you're a homeowner or a buyer and the cons many times outweigh the pros.
To better explain the issues with short-sales, check out the post entitled "Short Sales Not The Solution For Eveyone" by Joe Ferrara and Gustavo Blachman over at the Sellsius Real Estate blog. Here's an excerpt:
"Short Sales are simply not the solution for everyone. It is a dangerous idea that preys on people’s hopes, not to mention makes the current mortgage crisis worse. The truth is that most short listings will never get to the closing table. There are just too many factors to take into consideration. The short sales agreement is subject to the lender’s approval. Closings can be subject to marketable title. There could be multiple liens on the property. The offer presented could be too low for the bank’s expectation or below the appraisal/broker’s price opinion. The seller may not qualify for the program. The buyer may lose interest during the process, which can take as long as six months. The area or condo may be blacklisted. There are simply too many uncertainties surrounding this dangerous practice in these unprecedented times."
The moral of the story is that short-sales are not for everyone. If you're a buyer trying to purchase a property that's a short-sale, you may be wasting your time if your buyer's agent, the listing agent on the property, the seller and the bank are not all on the same page and know what they're doing. And even then, the chance of it being approved is less than that of you winning at a Blackjack table in Vegas.