If a seller is upside down on their mortgage payments, it's becoming increasingly common for the lender to agree to a short sale, whereby the lender agrees to release the mortgage for a sum less than what's owed.
Are short sales good deals?
Every now and then a good deal will come along. Often times people hear the words "short sale" and routinely think of a seller that is in default and needs to sell their property fast to avert further financial problems. This is at times the case and can be an opportunity for a buyer to cash in on another's misfortune. In contrast, a lender may consider a short sale even if the seller is current with their mortgage, but property values have depreciated. In these cases the reduced price may in fact be consistent with actual market values rather than below.
What's involved in buying a short sale?
Always do your homework before making any offers. Using an experienced real estate agent from LDKA Group, LLC (dba: Orangehill Realty) to support your research of a property will help you make informed decisions. We can help discover to whom the property is titled, the amount owed to the lender, and whether or not a foreclosure notice has been filed. Acquiring these facts can help you determine how much to offer.
Hire a REALTOR® with short sale knowledge. The real estate agents at LDKA Group, LLC (dba: Orangehill Realty) can help expedite the transaction and make sure you're protected. Don't allow inexperience to hold up the closing process. Put our experience and knowledge to work in your favor.
Even with an experienced real estate agent and under the best circumstances, buying a short sale property will probably take longer than a typical real estate transaction. Be informed that most short sales will not close in less than 30 days. Remember that you're not only getting approval from the seller, but the lender must also agree to the terms of the sale. Commonly, your offer will be presented to a committee to approve which will add time - sometimes even 2 to 3 months.
Home protection warranties, buyer credits and allowances, and closing cost concessions are usually not up for negotiation when working with a short sale. The lender will be selling the property "as is" which means the lender isn't going to pay for repairs. Make sure you reserve the right to perform inspections for pests, HVAC, electrical, and other critical areas. At LDKA Group, LLC (dba: Orangehill Realty), when we write an offer, we are looking out for your interests above all else and will always recommend that you make your offer contingent upon the results of the inspections.
When you are ready to buy, whether it's a short sale or a typical home sale, LDKA Group, LLC (dba: Orangehill Realty) can help you. Utilize our experience and knowledge of real estate to make sure that you're getting a fair deal and are protected during the complete purchase transaction.
