It’s a frequently asked question in today’s hot Hawaii real estate market. Most people, especially today’s actively shopping homebuyers, are aware of the massive amounts of foreclosed homes in Hawaii and every other state that have been the bane of the housing market for a few years now.
But should today’s homebuyers be looking at short sales for their next home or should they be running for the hills instead at the mere mention of the phrase?
It ultimately depends on your timeline because “short sales” often take a loooooong time to actually get bank approval and close. You might have your heart set on a townhouse in Kapolei or a lovely 4-bed home in Lahaina, but are you willing to wait six months? Nine months? Even longer???
And here’s the real kicker: the bank might never agree on your offer. Or the seller could get fed up with the whole process and withdraw. You could end up waiting just to get rejected. It’s unfortunate, but such is life when trying to buy a short sale.
Now as investors, we actually want to buy short sales because we’re ok waiting for the process to take shape, and we can even help push along the approval process (if you need a short sale, then go here now).
So What Should A Home Shopper Do?
However, if you’re looking for your next actual home for you and your family to live in, then you need to consider your timing. If you don’t mind waiting, then go for a short sale. You can likely get a great discount off market value, especially if you don’t mind purchasing a fixer upper (short sales are often the result of the previous owner being unable to financially maintain the home’s condition).
But if you either don’t have the luxury of time OR you’re anxious to take advantage of today’s hot real estate market, then you may want to avoid short sales and focus on more traditional listings where you can close in 45 days or less. You can still try buying a distressed property to scoop up some equity, but at least you won’t have to worry about a bank pulling the strings and determining your ultimate homebuying fate.