What is a short sale? If a property is being sold for below what the current seller owes on the home and the seller does not have the funds to make up for the difference at closing, it’s considered a short sale. A short sale is not the same as a foreclosure, which is when the property seller’s lender has taken title of the home and is selling the property directly.
Are you a good candidate for a short sale purchase?
- You have to be very patient. After your offer is accepted by the seller, the seller’s lender (s) has to approve the sale before you can close. This can take anywhere between 2 months and up to 6 months (sometimes even longer)
- Your financing has to be in order. It is in important to show you are well qualified and your financing is set.
- You don’t have any contingencies; if you have have a home to sell, or be in a hurry to move in to your new home
Some risks faced by buyers of short sale properties include
- Potential for rejection. Lenders do want to minimize their losses. Make your offer as close to fair market value as possible, the lender can accept, come back with a counter or reject.
- Bad terms. Lenders can change any of the terms of the contract that you have already negotiated, you may choose not to agree, but may have lost months waiting.
- No repairs or repair credit. The lenders are already taking a loss on the property and will most likely ask you to take the property “as is”
If you are serious about making an offer on a short sale property, or interested to know more about the short sale process, let’s talk.
Next post: Short Sale Tips For Sellers