Short Sales Real Estate
Have you heard about short sales? Are you thinking that you might want to buy a short sale? Well, here’s the long AND the short of short sales:
1. Short sales are designed for the Seller – yep, that’s right, it’s a process where the Seller partners with their mortgage holder to help them SELL their home SHORT of what is owed on the home. In other words, they owe more than what the home is currently worth. This has become more frequent in the past few years because of the decline in home prices. Coupled with a financial hardship (illness, job loss, divorce) this creates the opportunity for a home owner to list their home as a short sale.
2. “Middle Child” – Short sales are kind of like the middle child, sandwiched in between a traditional sale (Buyer & private Seller) and a foreclosure/REO (Buyer & Financial Institution). It has attributes of each kind of sale and it’s important for a Buyer to understand how this will both benefit them and also impact their home buying purchase.
3. Buying a short sale takes a commitment from the Buyer – the main hurdle for an enthusiastic home buyer is the length of time it takes to reach settlement. On average it can take 3-6 months depending on the complexity of the lender(s) and the condition of the home. Additionally, an offer on a short sale home cannot be contingent upon the sale of a another property – in other words, if you own your current home and need to sell it to buy the new one, a short sale is not for you.
4. Value – it’s very important that a Buyer interested in a short sale understand that the ultimate sale price is based on an appraised value of the home, a fair market price. This takes into account the condition of the home, which frequently is just like most other homes on the market. Short does not automatically mean discounted. Short sales are not clearance sales, not foreclosures and not a significant opportunity to gain a huge savings on your purchase.
For answers to any questions that you have about the pros and cons of buying a short sale or the strategies you can use to save the most amount of money on your home purchase, contact us by email or phone and one of our representatives will be happy to help.