Are you in the market for a new home? Or are you a new real estate investor who’s seeking to buy a new property? Whatever the case, buyers who may be considering a short sale must be aware of many points as they move forward.
A short sale involves the sale of a property for a price that’s less than what’s owed on the homeowner’s home loan. It serves as a nice alternative to a foreclosure, enabling the property owner to get out from under the burden of the property. As a result, these home sale transactions tend to be a bit different from a traditional home sale.
The first and most significant difference is the fact that the lender will need to approve your offer before you can close on the property. In the past, it used to take weeks or even months for the lender to approve or reject an offer on a short sale, but new legislation is in place in many regions, resulting in a more expedient process. The exact timeframe for the approval of your purchase offer will vary according to factors such as the difference between your offer and the amount owed on the property, along with how many short sales are currently being processed by that particular lender.
It’s important to understand that even with this added step in the process, short sales tend to proceed much faster than most traditional home sales because the sale will not be contingent upon the residents finding a new home (which can delay the process if they cannot close on their new home for a period of time.) In the case of a home short sale, the lender has the greatest impact on the timeframe for the transaction.
Short sale buyers must also remember that short sales are typically sold as-is, so it is not customary for the buyer to request home improvements or repairs. Therefore, it’s essential to calculate your offer with the cost of any necessary repairs or upgrades in mind.
Also, buyers should be cognizant of the fact that the outgoing residents may not be entirely kind to the property. Understandably, some outgoing homeowners are upset about the loss of their home and as a result, they may be especially rough on the property while moving out. In some instances, soon-to-be-former homeowners have been known to intentionally damage the property. If this occurs, it’s wise to contact the lender and document the damage.
Fortunately, though, most short sales go off without a hitch and it results in a win-win-win scenario: the homeowner is relieved of the financial burden of the property while also avoiding foreclosure; the lender recoups some of their money (plus, they avoid a potentially costly and time-consuming foreclosure); and the buyer enjoys a very competitive price on the property.
Navigating real estate sales and the short sale process can be a challenge, but this is where you can benefit from working with a real estate investment and short sale expert like Kristine Zelazo, better known as the Short Sale Gal! Call Kristine today at 800.664.0616, x802.