When searching for homes, price is often one of the largest factors that goes into the decision to purchase. The cheaper the better tends to be most home buyers’ motto, so long as they don’t sacrifice other elements that are important to them like size and location. In today’s harsh economic climate, many homes are selling for far under their actual worth. A lot of these homes are short sales.
When a home owner falls behind on their mortgage payments, short sales occur. The home owner’s mortgage lender agrees to allow the home owner to try to sell the home for a lesser value than what’s still currently owed on it, instead of going through the foreclosure process, which can be emotionally draining for everyone involved. This is not without its caveats, although it can be a great deal for a would-be buyer.
If you are considering putting an offer on a home being offered up at a short sale, there are a few things you should know. First, the seller’s acceptance of your offer is only the first part. Since the home is being sold for under what is still owed on the home loan, the lender will be taking a financial hit as a result. This also means that the lender has the final say as to whether the offer is accepted, not the seller. While the seller might accept the offer relatively quickly, it could take the lender weeks or even months to accept the very same offer. If you’re trying to purchase property quickly, this may not be the best way to go.
The costs on short sales might be higher than you first assumed. The home is being sold as-is, according to most lenders. If the inspector does find something wrong with the property, it’s on you to fix it, although there’s no stipulation against actually having a home inspection which, incidentally, you should have done no matter what. In this instance, the lender will likely not be open to negotiations.
If you’re looking for a deal of a home to buy, short sales can consequently be a good option. Keep your expectations realistic during the process and just be sure to note the pitfalls.
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