Short Sale SellersBuying a Short Sale
Buying a short sale without any idea on the process, or lack thereof can be a daunting situation to experience. Take heart that there are experienced real estate professionals that can assist you in making the right choices.
In today’s housing market, having 20% down to buy a short sale property is like being a king as you will be able to make your own deal, no matter who the seller is. For a good deal, look for people who have enough equity in their homes so that the sale price can cover much of the loan balance. Many people are desperate to sell their homes as their neighbors continue to reduce their price.
Determining Your Risk
Some short sales may have major issues with the house such as: electrical, foundation or plumbing. In these cases, you may not find the proper financing to get the property and won’t be able to do so until repairs are done. In these cases, unless you have hard cash to pay in full, walk way from the property as it can open up many risks to you as the buyer. You don’t want to perform repairs before closing escrow due to any of the following:
1) Your loan rate and terms expire and you are not able to qualify for a new loan within your terms.
2) The foreclosing lender will not give the seller an extension to the short sale and forecloses on the property.
3) The seller decides not to sell for whatever reason and cancels the contract after you’ve done the work.
4) Issues with repairs such as time and money may arise.
5) You are spending money on a house you don’t own and may never own.
Should You Wait to Buy?
Many real estate agents hear this lately as home buyers want to know is the market going to get worse?
There are an increasing number of short sales entering the market which is causing many challenges for real estate agents and their clients. The greater number of bank short sales on the housing market can help you get a possibly lower purchase price. Do your research, hire a good realtor and ask many questions to get the best deal possible.
