What to Expect When Buying a Short Sale
Buying a short sale can provide you with an opportunity to save a substantial amount of money off of the regular price of a house. At the same time, buying a short sale is not like buying a regular house. You need to know what to expect during this type of transaction.
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Short Sale Basics
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A short sale is a process in which a financially distressed homeowner sells a property for less than what he actually owes to the lender. The lender then forgives the rest of the balance. If you are the buyer in this type of transaction, you can buy the property for less than what you would normally pay for it. Sellers use this strategy to help avoid foreclosure and to salvage their credit a bit.
Lengthy Process
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If you attempt to purchase a short sale, you have to prepare for a lengthy process. This is not a process that can be completed in a few days. When you make an offer on the house, the lender is the one who ultimately has to accept it. In some cases, the lender can take multiple weeks before processing the paperwork for a short sale. This means that you have to simply wait for the lender to accept before moving forward.
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Pricing
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When buying a short sale, it is important to find out who generated the listing price for the property. In most cases, the owner and the real estate agent come up with the listing price. This does not necessarily mean that the lender will take the price if someone offers it. In some cases, you might find a price that has already been approved by the bank. These types of short sales are the easiest to buy because you already know what the bank will take.
Necessary Repairs
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When you buy a short sale, you may have to perform repairs on the property. Many of these properties have problems associated with them because the owners know that they will eventually lose the house through foreclosure if the house does not sell. Before buying the short sale, you may want to hire a property inspector to look at the house. This way, you can determine how much money must be invested in repairs before buying the house.
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