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Short Sales and First Time Home Buyers, a Match Made Where?

short sales and first time home buyersHere in New Milford, CT short sales are on the rise. As I write this, 37.5% of all the homes that are in a pending sale status in New Milford are short sales. That is a big chunk of them, and the bulk of those are listed below the $300,000 mark. That tells me many of those buyers are first time home buyers who are staring at their computers and cell phones waiting for that email to come through with some news.

And waiting and waiting... and waiting.

Often times there is no information coming from the other side. It is not because they aren't working on, or because they are ignoring you. It is because...there really is no news. Nothing. And they can't GET any updates for you. Because there might not be any.

I get very frustrated for my buyers too. There is nothing I can tell them. And I do mean nothing. So, everyone waits. The buyer, the seller, the buyers agent and the sellers agent. Everyone waits. Of course there are some that go through relatively quickly. I hear agents brag on it, but I have yet to have it happen. It often depends on who the lender is, who is doing the negotiating, is their more than one mortgage, are their any other liens on the property, who is handling the file at the lenders end... the list goes on and on. There is nothing typical. What was one person's cake walk from a particular lender suddenly becomes the next persons worst nightmare. No rhyme or reason.

So, with short sales on the rise here in New Milford it can often feel like the ONLY option for a first time home buyer. Before making an offer a buyer needs to understand this process is not a short one. And you need to decide if this is going to work for you.

Is time on your side? Your own lender will typically need 30 - 45 days for your mortgage contingency, then 15 days or more to close on the house after. Not an unreasonable amount of time. BUT... before you get there you need to have an approval from the sellers lender to sell the house for less than what is owed on the property. That takes time, and I do mean time. And if I knew how much time I would have won the largest power ball in history and NOT writing this post because I would be able to see into the future! 30, 60, 90 days or more. And I have heard of much, much longer. With no, and I repeat NO communication from the lender. And once they decide it is a go, they will expect you to close as promised, to meet all your contingencies as per the time line in the contract.

I remember calling a buyers agent to tell her the lender agreed to the sale price. I said, now the clock starts ticking, so you have 14 days as per the contract for the mortgage contingency, the time frame you insisted on, (no matter what I said) the time frame you said their mortgage company would deliver by. The buyers agent said that her buyers would need more time because they hadn't done as they said they were doing, they never started anything with their lender after the initial pre approval because the sellers lender made them wait, turn about was fair play! The sellers lender told me there would be no extensions, put the house back on the market as soon as the mortgage contingency date passed.

What is your current living situation? If you have to be out of where you are by a certain date, that won't happen. You need to have flexibility, perhaps a month to month rental so that when you find out it was approved you can give your landlord notice. Or family that you can move in with if you lease somewhere and have to be out. And somewhere to store your stuff. This is a big problem for many, not just first time home buyers.

Do you have patience? I mean patience, like the patience of a saint. Because you will need it. Seriously.

Are you handy? Often times sellers who are in a short sale position have been unable to maintain the property as it should be. And their lender won't care about that. Usually these properties are sold "as is".

real estate short salesYour biggest pill to swallow... What do you mean I should do my home inspections up front? . Before the sellers lender has approved the sale at a price I can agree to? Yes, I recommend it to my buyers and insist on it when I list a short sale. The reasons are very important ones. As I stated above, often times there is deferred maintenance that the seller will NOT be able to address.  And if you are using an FHA or CHFA mortgage you will want to know BEFORE you wait for their lender to get back to you that unless certain things are addressed you can't get the loan. It takes long enough to get the lender to respond. If you wait till after that to inspect and expect to renegotiate the sale price YOU RUN THE RISK OF GOING BACK TO SQUARE ONE AND STARTING ALL OVER AGAIN! If you know up front what is going on with the house you can change your mind and run away, or you can renegotiate with the seller before the paperwork is submitted to their lender.

So, you have time on your side and are already on the way to sainthood based on the amount of patience you have and are ready to make an offer on a short sale now. GREAT! But make it a good offer. The seller may accept any low ball offer just to get things started, but the sellers lender has to approve it. They will send an appraiser out to the home to see what it is worth. This is independent of your appraisal and they are irrelevant to each other. It is not a wise idea to look at this as a way to get a really, really cheap house. If you are serious, make a serious offer.

Short sales are not for every buyer. And they are often not a match made in heaven... they can feel like something exactly opposite! But they can be successful. You just need to make sure you have your eyes wide open going into the purchase.

And you have lots and lots of time and patience.



Andrea Swiedler, Realtor, Southern Litchfield County Real Estate

2017 President, Greater New Milford Board of Realtors

2017 Connecticut Magazine 5 Star Realtor


 Search homes for sale in Litchfield County, CT.


Coldwell Banker Residential Brokerage

Litchfield County Regional Office,375 Danbury Rd, New Milford, CT 06776


© Andrea Swiedler 2009 - 2017

 Always do right. This will gratify some people and astonish the rest. - Mark Twain

Comment balloon 44 commentsAndrea Swiedler • May 23 2013 06:07PM


Good morning Andrea. This is superb, a real primer on the processa and funny to boot. That said, there isn't anything funny about the short sale and most buyers don't get it. Wonderful post!

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) almost 6 years ago

In Maryland, we negotiate the Home Inspection, Financing, etc. contingency times in the original contract between the buyer and seller (not lender).  Then we have an addendum that states that the contingencies begin WHEN THE SELLER'S LENDER APPROVES THE SHORT SALE.

That way, the buyers have no money out of pocket prior to lender approval.




Buying a Short Sale is akin to being subjected to Chinese Water Torture.  It won't kill you but it is designed to make you talk WALK. 

Buyer's Agents MUST prepare short sale buyers with facts.

Buyer's Agents MUST vet both the seller and the listing agent for competency with short sales.

Buyers MUST be ready, able and WILLING to wait for the banks contrived delay. 

Buying a short sale requires buyers to be prepared to meet the bank's attempt to cause the buyer to walk away.


Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley,, MD & VA Homes and Real Estate) almost 6 years ago

good read, so true, i need to look at what pending sales are shorts

Posted by Michael Gendreau, Edina Realty (Edina Realty) almost 6 years ago

No matter how much I explain short sales to my very first time buyers, they usually lose patience the first month.

Posted by Terri Poehler, Coral Springs Real Estate Agent (Realtor) almost 6 years ago

Sheila, interjecting humor in this very, very painful subject makes it a bit easier for me to take? Thank you.

Lenn, that is interesting. The talking heads seem to agree that those need to be dealt with up front, I do understand what you are saying though. The issue is.... the process will get kicked back to the curb and the waiting process begins anew if the buyer expects any different price because of what they find. So, if they have a year or more to wait, ok by me! (not really)

Michael, I was shocked when I realized what that percentage is. I know part of the reason it is so high is because... short sales sit longer in the pending sale status. But boy is that too high for comfort.

Terri, they do, no matter how much you educate, what you have them sign, nothing matters. They loose patience and get angry with US...

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Andrea, I can see where this is a very frustrating process for the buyer, seller and the agents involved. Time and patience when it comes to a successful short sale will make anyone a Saint.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA almost 6 years ago

Andrea.  With short sales, the home inspection contingency is "for buyers information only".  The purpose is to give the buyer the opportunity to have the inspection done and then, based on the findings of the home inspector, either go forward with the "as is" condition or send a NOTICE to the seller that the contract is void.

No negotiation on price, terms or repairs involved.  Just go forward or void the contract.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley,, MD & VA Homes and Real Estate) almost 6 years ago
I had one of those surprising short sale stories recently. My first time buyers were having a hard time competing in a multiple offer market. They submitted an offer on a short sale, but weren't the highest offer. What they had was a compelling letter, letting the seller know they'd stick with the transaction. We were countered in price to come a bit closer to the highest offer received. The big surprise came when the lender approved the short sale 3 days later. The transaction had several hurdles along the way, but it did close I less that 30 days. My clients are thrilled to have bought a house before they were priced out of the market, but they have a LOT of work ahead of them on this one.
Posted by Karen Crowson, Your Agent for Change (Coldwell Banker Residential Brokerage) almost 6 years ago

Andrea, one thing for sure, Short Sales are not for everyone, including Realtors! Breathing down on somebody's neck 24/7 is not going to make the process any shorter. The whole experience and the length of time varies not only based on the SS Lender but the negotiator from the bank as well as the listing side. Some have no business doing short sales, in fact, they're horrible at it! Good Post!

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) almost 6 years ago

Michael, it is a difficult process, especially for a first time home buyer.

Lenn, now that I can agree with. And I tell anyone, anyone that insists on waiting it is for informational purposes only. For a seller that can be devastating to get so far and find out the buyer is going to walk, time wasted on marketing. You can say that, sign whatever, etc. until the cows come home and still the buyers don't understand they will have only 2 choices. Stick it out or walk. I also get very worried that it is unrealistic for an FHA or CHFA buyer to wait, opportunities go by, etc. It is a head scratcher at times because I believe the true level of understanding, no matter how much education is involved is low.

Karen, wow, wow wow and wow! A true miracle story! I mean, post it on FB! No irreverence intended, but that is akin to finding the face of Mary in a grilled cheese sandwich!

Beth, no, sometimes it even makes the procces longer... some people respond to that pressure by putting on the brakes.


Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

The day is coming where these will no longer exist...To own property when that happens is a good spot to be in

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) almost 6 years ago

I can't see how a first time buyer would match with a short sale. They are usually so anxious and excited to buy their first home that they don't want to wait.

Posted by Suzanne Otto, Your Montgomery County PA home stager (Six Twenty Designs) almost 6 years ago

We have seen a downward trend in short sales here in Arizona. Thank Goodness.

Posted by Edward & Celia Maddox, EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD (The Celtic Connection Realty) almost 6 years ago

Richie, yes indeed, I dream of that day!

Suzanne, with the shrinking market, sometimes it just is the only option.

Edward & Celia, we are just moving deeper into it. I am looking forward to that day.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

That is a difficult combination.

To prep a first time buyer for a process you never really know the background information, where it's going to land, and what the bank's response will be, along with the waiting period, really is a recipe for anxiety for a first time buyer.

Posted by Ralph Gorgoglione, Hawaii and California Real Estate (800) 591-6121 (Maui Life Homes / Metro Life Homes) almost 6 years ago

We do about 50 short sales a year. We do not take contracts unless they agree to normal inspection time. Too many do that last minute routine and then use it to cancel leaving my seller in jeopardy and after all they are my responsibility. The buyer should do this anyway like on an equity sale becasue if they don't, then they may miss out on another home by waiting. best to find out up front. Lastly, the best buyer for most short sales is an investor and we actively market ours that way. They have patience that first time buyers have, and they are ususally flush wirth money unlike like first time buyers.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) almost 6 years ago

Hi Andrea - great post. First time home buyers are in a great position to take advantage of short sales IF they can stand the wait. It's a great way to break into the housing market for less money, but the frustration of waiting often sours less experienced buyers.

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) almost 6 years ago

Well, I so my best to help first time buyers. They are so nervous. Many of them are FHA and no one wants them( if they have multiple offers, what usually is the case for entry level priced properties). My clients are patient and willing to wait as long as it takes, if they found the property they want.

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) almost 6 years ago

Andrea we don't like to spend the Borrowers money before there is a Short Sale approval.  However, we completely underwrite the loan contingent on the property appraising once the Short Sale is approved.  When the Short Sale approval is received we rush the appraisal and the Underwriter finishes underwriting the loan as soon as it comes in. 

Two weeks is very aggressive, and most likely unrealistic especially since the Seller's Bank has in most cases made everyone wait for 90 days.  Three weeks is do able after Short Sale approval.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 6 years ago

I always tell buyers you have to have two qualities to consider short sales, patience and flexibility. Patience to be able to wait, not knowing when or in some cases if the short sale will be approved. And flexibility so you can close sooner or later dependent on the circumstances as they arise. Once I've explained the process very thoroughly, most buyers have done a good job of deciding whether short sales are for them or not.

Posted by Aaron Hofmann, aka Mr. Smyrna Vinings (Atlanta Communities) almost 6 years ago

Ralph, it is very, very  hard for a first time home buyer to go through this process. No matter how much you explain it, living it is a very, very different story.

Joe, that certainly is the concern, leaving our sellers open like that. And many a buyers agent will disagree. I understand the disagreement, but there is really no other way.

Wayne & Jean, it does sour their experience, and no matter what you say or do, it is just very, very hard for them to understand until they are in the thick of it.

Inna, FHA is a tough one for sure, as is our CHFA, but it can be done if the buyer has the patience.

George, I assume you were talking to me. I argued with the time frame, but was told they all knew what they were doing. The lender that held the original mortgage that was selling short stepped up to the plate and loaned the money on the house to the buyers in record time because I did have to put it back on the market, and they did understand the lender was serious about those  time frames. I was accused of all sorts of things.

Aaron, I find that most buyers just don't believe it. It is not for the faint at heart. Or for many buyers situations.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Andrea yes the comment was for you, see what happens when you get to be my age ...... LOL

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 6 years ago

George, see, I knew that, LOL. Same thing here. What can I say?

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Andrea, It's a long difficult process. Not many have the stomach for the huge amount of "unknowns" involved.

Posted by Connie Harvey, Realtor - Nashville TN Real Estate (Pilkerton Realtors) almost 6 years ago

Andrea, I tell buyers a short sale is like building a home in reverse - you are waiting and waiting and waiting for the paperwork to build its way to the negotiator who will give you an answer and hopefully a closing date. It's not for the faint of heart and those who have a deadline, which is why many first time buyers avoid them. 37% is a very high percentage. Thankfully, we are beyond that here and seeing many more Seller-owned sales. Sharon

Posted by Sharon Alters, Realtor - Homes for Sale Fleming Island FL (Coldwell Banker Vanguard Realty - 904-673-2308) almost 6 years ago

Connie, I agree completely!

Sharon, the problem is despite people thinking it will work, or thinking they have the patience, no matter what we say, when it comes right down to it they just can't handle it. Very smart what you tell them!

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Information and an experienced listing agent is key...inspection up front is required to write on our short one needs a surprise 60 days later.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) almost 6 years ago

Short sales and patience needs to be understood by the buyer. If not, tell them to go away. I once had a short sale a buyer walked away from and we sold it for more than the 1st offer. Not a lot more, and the bank even got more interesting to deal with.

Posted by Brian Schulte, SFR, Sierra Vista, AZ (Allison James Estates & Homes) almost 6 years ago

Short sales are not short!  Buyers have this idea that they will make a great deal going with a short sale, but they are generally very sadly mistaken! 

Posted by Lise Howe, Assoc. Broker and Attorney Licensed in DC, MD, VA, (Keller Williams Capital Properties) almost 6 years ago

The buyer needs to know that it is not a sure thing and other deals will pass them. Patience is a must with no expectations.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) almost 6 years ago

I do a lot of short sales and the cash buyers tend to be the better match than I first time buyer that needs a mortgage.  Also, in the sales contract you can put language in to give more time for the buyer to get a mortgage.  The short sale approval letters that I received have a mininmum of 45 days to close once the letter has been issued, 60 days if it is an FHA buyer.


Good luck with them in the future.

Posted by Keith Lawrence, ABR, CDPE, SFR, 203K Specialist (RE/MAX Properties) almost 6 years ago

Sally & David, and an experienced buyers agent helps too. But there are buyers that just can't handle the stress of a short sale as the short sale doesn't unfold in a timely fashion!

Brian, it is such a roller coaster ride for all of us. I would often like to lose my cool with ANYONE, but it gets me nowhere. Real fast... bad news.

Lise, it is true, and sadly, often the first buyer is the guinea pig.

Harry, and while those deals pass by they have to understand they are actually under contract. It is such a hard position for a buyer to be in, and the seller as well.

Keith, cash buyers still can get testy, unless they are very, very experienced with short sales. And yes, I always tell the buyers agent to make the mortgage contingency a reasonable time frame for their lender, get it from the horses mouth. 30 days? 45 days? All from lender approval. And same with the closing date. Because the lender will make them adhere to those dates. Thanks for the good luck wishes. I am afraid I need a bit more than that, LOL.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Hi Andrea, I haven't had the chance to read the aforementioned comments, so forgive me if I repeat any of the comments. Knee jerk response - short sales and first time buyers are a recipe for disappointment. Short sales are hard enough for seasoned buyers - why go down that road?

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) almost 6 years ago

Andrea: Love the choice in title for your blog post. We all know where the match made was.... and it certainly wasn't in heaven!! 

Posted by Joni Bailey, Your Huntsville / Lake Livingston Area REALTOR® (101 Main St. Realty) almost 6 years ago

Two that I'm working on now (Short Sales that is), did the old "change mortgage companies" after 3 - 4  months. Close to a year now on one and little progress. the other is about 5 months old and should be Closing in a few weeks. BOTH Buyers had SOME experience, but even for an experienced Buyer, it's frustrating.

Posted by Travis "the SOLD man" Parker; Associate Broker, email: / cell: 334-494-7846 (Team Linda Simmons, Enterprise, AL 36330) almost 6 years ago

Andrea, It's a difficult sell to have the buyers pay for a home inspection Before the offer is accepted, but I try to get them to do that as well.

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) almost 6 years ago

If ever there was a misnomer, SHort Sale is it.  There is nothing short about a short sale except maybe the frayed tempers of all involved.  Even after making the buyers aware of how long a short sale can take, they always find it surprising.

Posted by Lora "Leah" Stern 914-772-4528, Real Estate Salesperson (Coldwell Banker, 170 N Main Street, New City NY 10956) almost 6 years ago

Debb, no matter to me if your comment mirrors others because it is your opinion! I agree with you, the issue is that often it is the only choice in the market we have here.

Joni, oh yeah, LOL.

Travis, that is just so not fair. I have been there too and it is so disheartening. And on purpose I am sure.

Eric, it is hard but needs to be done.

Leah, good point, frayed tempers is right. I am losing a buyer because they have no information. My fault. All my fault. We have them sign papers, both buyers and sellers, same paper, and it is clearly spelled out about the fact there may be no updates until the offer is accepted, rejected or countered by the lender. We explain it, we make them think about it and then sign it with a copy given to them. Doesn't matter. Still my fault.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Hi Andrea,  WoW ....that's interesting..our short sales are down by almost 75%

Posted by Ronald DiLalla, No. Orange Cty Real Estate (Century 21 Discovery DRE 01813824) almost 6 years ago

Andrea, for us, short sale inventory is in short supply. Even when we had many of them, somehow, I waited for home inspection until the offer was accepted - good advice in your post and will change the way I looked at this aspect of short sale. Thanks.

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) almost 6 years ago

Ron, real estate is very local, what can I say.

Praful, your market is doing so much better than ours here. I read about it and weep.

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago

Banks need to improve their process to make this a smoother transaction. These properties need to be sold and we are bringing interested buyers. If they can expedite the process with decision making, on the banks part and on the investors, we could actually move this form of a purchase forward. Their current approach creates a 50/50 scenario if its going to closing, or not. My advise is the first time home buyers to stay away from short sales.

Posted by Valerie McNeal, CRS, GRI, CDPE, Integrity, Knowledge, Results (Keller Williams Integrity Bob Lucido Team) almost 6 years ago

You are right to let buyers know the value of a home inspection upfront. It can cost to be a buyer, and a few hundred is worth it to know such valuable information

Posted by Barb Fischer, San Diego and La Mesa Real Estate (Big Block Realty) almost 6 years ago

Valerie, if only.... if wishes were horses we would all take a ride. But alas, it is not that way. And often short sales are all that are available to certain buyers.

Barb, it is, I agree totally. And it won't slow the process down. They are always so surprised when they do one later and decide they want to renegotiate a price... even when they are told what that will do. What do you mean we have to start all over again if I want a credit for this, that or the other? Oh my....

Posted by Andrea Swiedler, Realtor, Southern Litchfield County CT (Berkshire Hathaway HomeServices New England Properties) almost 6 years ago