Purchasing a short sale property is a bit of a gamble. You could end up getting an excellent deal, but that is not guaranteed. Sometimes it could take a long time for your offer to be accepted, and end up not being worth the wait. If you are thinking about buying a short sale house, you should find a smart and trustworthy real estate agent to help you throughout the process. Additionally, you should take a look at some of the pros and cons of buying a short sale property:
Let’s say you wish to sell your property for whatever urgent reason, but you owe more money for your mortgage than the actual value of your home. You also don’t have enough money to just pay off the rest of your mortgage altogether. Your best option in this situation would be to short sell your property.
Before you can short sell your home, you have to provide the bank with evidence that you do not have the finances to pay off the rest of the mortgage. The bank will evaluate your situation, and if you are approved, they will permit you to sell your home for a short sale. Otherwise, you would have to go into foreclosure, which has the potential to be a more costly process for the bank.
(Potential) Good Deal: As mentioned above, purchasing a short sale home could potentially get you a great deal. This usually happens when the bank and homeowner are looking to find a buyer for the short sale immediately, so they will list the home at a low price that will attract more buyers. If you are quick enough, you may successfully find a home for a great deal.
Less Competition: Sometimes, the home buying process can feel like The Hunger Games. People will be scavaging for the best homes in an area with low inventory, resulting in bidding wars and skyrocketed prices. However, there is far less competition with short sales. The reason for this is that short sales often take a while to be finalized, and most home buyers refuse to wait that long.
Fewer Risks Than a Foreclosure: When short selling a home, homeowners will usually continue to live in their property until the sale is complete. During a foreclosure, however, they may leave their home vacant. This leaves opportunity for damage to occur from vandals. Homeowners may also be careless during the foreclosure and leave the house with damages. As a result, there is less risk involved in short sales of properties.
It Will Take Patience: It can take several months for your offer on a short sale home to be accepted and all of the paperwork to be finalized. Both the seller and creditors must approve the short sale offer, and escrow will usually continue on for an extended period of time. Therefore, buying a short sale home will require a significant amount of patience.
Might Not Be Worth the Wait: Not every short sale home’s asking price will guarantee a great deal. The bank will attempt to retrieve as much money back as they can, and can end up setting a high price.
Expensive Repairs May Be Required: When a homeowner wishes to short sell their property, it means they likely aren’t in the best financial state. Thus, you shouldn’t expect them to have completed any outstanding maintenance or repairs on the home. Once you take ownership of the home, you will be responsible for paying for these repairs. Prior to finalizing a deal on a short sale home, you should have a home inspection done to ensure no major repairs are required. This way, you still have a chance to drop out of the deal.
Consider Acuity for Title Services when Home Buying or Working with Home Buyers
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