Should I buy a short sale?

Should I buy a short sale?

Let’s start with a basic explanation of what is a short sale is. A short sale occurs when the seller of a house owes more on the house than what it is worth, and the seller is not able to pay the lender what he owes. This means the lender now becomes part of the transaction. The seller must get the lender’s approval to sell his house for a lesser amount than what the seller owes to the lender.

What does all that mean to you the buyer? It means the transaction is more complicated. You may get a good deal on the house because of the lowered price, but there is also a chance that the transaction may take longer or not happen at all. The lender does not have to agree to accept the short sale and often times does not agree to accept a buyer’s initial offer. In addition, the seller has to qualify for the short sale. The transaction may not go because the seller does not meet the lenders requirements for a short sale. Many real estate agents will make sure the seller does qualify before they list a property as a short sale, but not always. As a buyer, be sure you work with an agent who understands short sales and knows to ask these questions up front before you make an offer.

Most, if not all, short sales are sold as is. You can have a home inspection, but repairs will need to be made by you, the buyer. Also, most short sale homes will need some TLC before moving in.

When you understand the process of purchasing a short-sale property, it is much more likely to work for you. Although it can be more complicated and time consuming, you can frequently purchase a home with a fair amount of equity built into it. I encourage you to fully discuss the process with your agent before deciding if it’s right for you.

Please share this with someone you know thinking about a new home purchase or have them give me a call at 402-305-4335. I am never too busy to help!