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Tips for Buying Short Sales Property
Monday, April 6, 2015
Buying a short-sale property may seem like a good way to get a good deal on a house. But short sales are complicated, and there are some things you should keep in mind before going after a short sale.It can take a long time
If you are hoping to make a quick deal, then short sales aren't for you. The term "short sale" means banks sell property
for less than what is owed on the mortgage. So there will be a number of people along the way who will need to sign off on the sale. A typical short sale can take five to seven months to close.Don't expect to lowball on price
Because a short sale involves a price that is lower than what the bank is owed, don't expect a lot of wiggle room on price. If the advertised price has been approved by the bank, it probably is not willing to settle for much less if any. If the owner and agent have set the price without approval, they may have set it low in an attempt to draw offers, and the bank may not even accept the price.Expect to buy the property as is
In a short sale, the homeowner probably can't afford to make any needed repairs and the bank is not going to want to spend money on a property that's already underwater. So you should expect to buy the house as is. If there are major issues with the house, that already should be reflected in the price. Make sure you have it inspected before closing a sale, and if major issues arise ask for a credit or price cut. If the bank won't budge, it may be best to walk away.Show them the money
When you are buying a short sale, it's important to be well-qualified and have a good down payment. A bank that is doing a short sale for a borrower who can't make her payments does not want to deal with another iffy borrower. Nor does it want to risk having the long process unravel because the buyer can't get financing. Make sure you have a good credit score, get pre-qualified and have at least 20 percent to put down.
Short sales can be a good way to sell property
for banks and underwater buyers because they avoid foreclosure. As a buyer, don't expect the process to go quickly, though.