If you’re in the market to buy a new home, you’ve probably done your homework. You know all the buzz words and are familiar with the terminology. You’ve weighed all the options and are thinking about making an offer on a short sale home. Before doing so, it’d be a good idea to know all there is to know about purchasing a short sale. Following are a few tips for buying a short sale home.
What Is a Short Sale?
When a piece of property is not worth the amount that is owed on it, and the owner wants or needs to sell because they can no longer meet their financial obligations, they can approach the lender and ask if they’ll accept less than what is owed. In many cases the lender will agree to do this because it will negate the necessity of having to foreclose on the loan.
Foreclosure is something to be avoided from the standpoint of both the borrower and the lender. If the property is foreclosed upon, it will damage the borrower’s credit rating. Being forced to foreclose on a property can also end up costing the lender a great deal of money in real estate agent and attorney fees. In many cases the borrower will eventually have to pay off the Florida mortgage or pay the difference between the short sale and what they actually owe. When both parties agree the property can be listed on the real estate market as a short sale, both the borrower and the lender will have to approve any offer that is made on the home.
Find an Experienced Agent
If you come upon a short sale home that you feel is perfect, the first thing you should do is call a real estate agent. Dealing with a short sale is best left up to a professional. The agent will research the property and discover the relevant details of the sale. Using a real estate agent that has experience with short sales may be the best thing you can do. It will give you the best chance you have of getting the right deal. They’re in it to make money, and if they have experience in doing short sale transactions they’ll more than likely be able to get you the best possible price while cutting your wait time. They will be aware of any problems that need to be taken care of before a property can sell, and make sure they’re taken care of. Knowing the ins and outs of a short sale is a specialty, and a skilled agent can make the experience much easier.
Research Your Purchase Carefully
You can never do too much research on a short sale home. Finding all the facts that pertain to the sale is your best bet on an offer being accepted. Your real estate agent will be invaluable in this process. They will be able to develop a feel for the mind set of both parties. The borrower/seller will naturally want to get the highest price they possibly can. At the same time the lender/seller will also want to hold off for the highest offer, which will ensure they get their money’s worth for their loan.
Know What to Expect
There are a couple of things to remember about a short sale. One is that you will probably have to pay the agent’s commission. It is also more than likely that you’ll be expected to take the property as is; meaning any changes or improvements will have to come out of your pocket. It would be wise to figure these costs into your offer.
Generally a short sale home will be listed below comparable value homes, but because both parties have to agree before an offer can be accepted short sales usually end up going for close to market value. Frequently short sale homes that are listed well below their actual value have numerous offers, which may tend to drive the selling price up. Don’t be surprised if you are asked to pay at or near market value for a short sale.
One final thing to remember is that a short sale will probably not be a quick sale. Because both the borrower and lender need to approve the sale, the process can take longer than a normal real estate transaction.
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Guest post from Bailey Harris. Bailey writes for InsuranceQuotes.org