Even though buying a home can be stressful, the outcome is great. Landing somewhere you love helps make the ups and downs of buying a house well worth it. A short sale might have more peaks and valleys than other home buying experiences, but with the correct expectations, it might be the best purchase you ever make. If you do not know what a short sale is, you have landed in the right place.
What is the definition of a short sale?
A short sale is when an owner is selling their house for less money than the mortgage they owe on the property. The mortgage lenders might agree to take a “short” on the mortgage to release it for sale. This is usually seen as the last step before foreclosure.
What is needed for a short sale to go through?
This depends on the lender. The lender needs to agree to accept less than what the owner owes on their mortgage, but this comes with contingencies. For instance, the lender needs to agree on the amount the owners set as their home sale price. This makes short sales take much longer than a private sale. As a home buyer, you should be willing to wait an extended period of time to see if your offer is accepted by the lender and have to rush with inspections and other details before the house closes.
Can you negotiate the price of a short sale?
The answer would be most likely not. The sales price of a short sale is usually negotiated between the home seller and their lender. The home buyer has little to do with the process and is in fact more often than not accepting the price and condition of the house as is.
What should you do while waiting for the lender to respond?
Do not mentally move in to this home or get too attached. Even though you might get a better deal than the market average in terms of home sale price, the risk that the deal falls through is very high. Keep looking for a great place to live, just in case the short sale doesn’t work out.
What else should you do before closing on a short sale?
Keep saving money. You might be waiting for a while to find out if you will even be approved to purchase the short sale. While you are waiting and searching for other homes, save money for the down payment as well as any potential home renovations you may have in mind. Do your research and compare general prices with friends and neighbors.
Buyers often times get caught up in how a home looks within the property lines and forget to take a look outside and meet the people that can become their neighbors. A neighborhood you love is just as important as the high ceilings or big master bath. This could make or break your house purchase, whether it is a private sale or short sale.
Do you have a question about short sales? Click here to contact Desert North Realty today!