How To Buy A Short Sale Property

shortsale.jpg

You’ll need time and the right temperament to purchase a short sale property, but you could save thousands if you do.

It’s no secret that some great real estate deals are out there, thanks to our lagging economy and the housing crisis. Those who are able to purchase right now will likely see a number of properties advertised as “short sale.” So, what exactly is a short sale, and is one right for you?

A short sale is…

A short sale means the home owner has made a deal with their lender to sell the property for less than what is owed. This helps the seller by keeping a foreclosure off their credit history and helps the lender by offloading the property faster, and often for a better value, than if the property went into foreclosure.

What a short sale means to a buyer

A short sale can be a great deal for a potential buyer, who can purchase the property at a substantial discount. But, as with all things too-good-to-be-true, you need to do your research, be prepared, and be patient when it comes to the short sale process.

How to have a successful short sale experience

Use an experienced agent. Short sales can be a complicated and sometimes long process. Ask potential agents how many short sales they have successfully completely. If you end up with an inexperienced agent, you probably shouldn’t even consider a short sale property.

Tour the property and have it inspected. Short sale properties are sold “as is.” The seller can’t afford to make any repairs and the lender isn’t willing. At the very least, you’ll want to tour the property to see what condition it is in and to estimate how much any necessary repairs will cost you. Consider bringing in a professional home inspector for a closer look and repair estimate.

Look at comparables. Yes, you’ll be purchasing the property for less than the seller did, but that doesn’t necessarily mean you’re paying what it’s worth. Lenders will typically price short sales close to current market value; but remember, they are trying to recoup as much money as possible out of the deal. Check recent comparable sales in the area to determine if the price is right.

shortgraph.jpg

Research all liens on the property. Find out who has liens on the property and if there is another lender with a second mortgage on the property. While not a deal-breaker, multiple lenders could complicate matters. You’ll need to determine if you can—or if you want to—take the extra time and deal with the added frustration this situation could cause.

Be patient. Lenders aren’t known for their speedy responses when it comes to short sales. It can take three months or more to negotiate a short sale. If you need to move quickly, a short sale isn’t right for you.

Don’t give up. Negotiating a short sale is like negotiating any other real estate transaction. Your first offer may not be accepted, but that doesn’t mean the deal is over. Talk the situation over with your real estate agent and make another offer that you feel is reasonable for the property.

Learn more about what is a short sale and why you might choose a short sale.

This article contains general information. Individual financial situations are unique; please, consult your financial advisor or tax attorney before utilizing any of the information contained in this article.

Source: Realtor.org, Bankrate.com, Trulia.com
Search All Articles
Related Articles
How to Prevent House Fires
05fire-jumboThere are several things you can do to prepare and prevent disaster from striking your home.
5 Things to do if your House is Still on the Market
House-for-saleThere is a wide array of reasons why your house might not have sold yet, not all of which are in your control.
Things to do Before Buying a House
NewhomeBuying a house is only the first of many new adventures.
5 Things The Pros Do Before Every Board Meeting
Board-meeting Preparation not only enables you to participate more thoroughly, but you also appear more professional and reliable.

More...
Most Popular
First Time Home Buyer Programs - California
Houseredroof120The California Housing Finance Agency helps low-income families with programs for first-time homebuyers.
How Can My Community Prevent Child Abuse?
Leaf_logothumbTips to educate individuals and communities about how to prevent child abuse and neglect.
9/11 National Day of Service and Remembrance
Sept11thumbService projects marking the eight year anniversary of 9/11 will take place in all 50 states.
Understanding Financial Statements: Internal Controls
April103_thInternal controls checklist to insure financial transactions are executed with the proper authority

More...

Zip Code Profiler

Neighborhoods, Home Values, Schools, City & State Data, Sex Offender Lists, more.

Instant Home Value!