buying short sale home
The current real estate market is a speculator’s dream. Economic factors and the housing crisis have guaranteed that there are countless bargains and unlimited availability with regard to the homes that are on the market. All of this being said, there are many factors to consider when you find a home that you believe is being listed at a price that is lower that what the neighborhood dictates.
Short sales can work out to the advantage of many buyers, but you must know the details and educate yourself before you enter into one.
How a Short Sale Works
A short sale is when the lender of a seller of a house is willing to accept a lower offer to get rid of a mortgage. But you must understand that just because a house is listed with these terms doesn’t mean that a lender needs to accept any offer you give, regardless if the seller is happy with it. In addition, other terms of a short sale dictate that a seller does not need to be in default on the loan or behind on mortgage payments in order for a short sale to happen. A house could be listed with terms for a short sale if real estate values have fallen in an area and the home is now worth less than what is owed on it. In addition, a short sale may also happen by a seller’s lender if the seller is having financial problems, even if they are not in default.
Pre-foreclosures can happen in as little as thirty days or less, but you must be aware of all the details involving a sale such as this. Always know that you are still making an offer on a pre-foreclosure home.
Risks and Benefits of a Short Sale
If you are interested in a purchasing a home like this it is important that you work with your real estate agent to pull the public records on a listed piece of property. The real estate agent can find out who holds the title and how much is still owed on the property to the lender. In addition, the agent can also find out if any foreclosure notices have been sent. Taking these steps will help you understand how much you need to offer.
Also, make sure you hire an agent who has experience in completing these type of real estate transactions. Someone who has a background in this area will be an invaluable resource in making sure you are protected and be able to make sure the transaction is smooth.
In addition, before completing any short sale make sure that you do not waive any right to home inspections relating to bugs, construction and stability. Many times buyers waive their right to these items because the seller’s lender forces contracts to be signed “as-is.” Understand that by waiving these items you will be responsible for all repairs which could negate the benefits of a short sale.
There are many benefits to purchasing a home through a short sale and as long as you are educated and knowledgeable about the process and the procedure, you could be very happy with your real estate investment at a discounted rate.
Michael Taylor is the broker/owner of Red Door Real Estate which focuses on the northern suburbs of Indianapolis and specializes in Fishers Indiana subdivisions including Brooks Chase homes Fishers.
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