Short Sale Home » Short Sale Buyers » Buying A Short Sale House

Should you be concerned if you are buying a real estate short sale? No, but you should stay well informed when going through a process like this with a seller who is experiencing financial hardship.

If followed closely as a traditional sale, the short sale buyer with a 15 day contingency after the opening of escrow. During this time an inspection should be ordered to clear up any uncertainties about the property before the buyer signs off on the contingencies.

Although with any sale, you cannot be absolutely sure the property will remain in the same condition it was in when it was inspected. Especially with short sales, you are not quite sure how the homeowner will leave the house. Although, they could be held for liable for any damage, so make sure to take photos of the property during inspection. The bank is in no way liable for anything, as most times the house is sold “as is”. It is really between the buyer and the seller, although the seller may not have any money to fix anything in the house.

FHA Loans and Short Sales

FHA loans have strict guidelines on the condition of the property being purchased. So, in short sale situations, having the home in good condition is quite important and many times lenders are willing to make necessary repairs to get the home sold. Situations vary from lender to lender, but key elements like electrical, roofing, heating and air, plumbing and appliances need to be in working order. FHA would require that these repairs be made prior to closing.

In FHA situations, your best best is to work with a lender familiar with FHA guidelines and restrict your home search to homes that have less problems. FHA appraisals could break a deal, and for that reason conventional loans and cash are seen as a better bet for pre-approvals.

Tags: fha appraisals, financial hardship, necessary repairs, strict guidelines, uncertainties