The recent problems encountered by the housing market have made many of us more familiar with real estate terms. While we all know what the term foreclosure means, we may not be as familiar with the term short sale; a short sale is when a lender has agreed to allow the homeowner to sell the home for less than what is still owed on the loan. This selling technique allows the seller to avoid going through the foreclosure process, but they will likely still experience damage to their credit, which may make it harder for them to find a new place to live.
If you are a buyer considering purchasing a short sale home, there are some things that you should be aware of. First of all, the process of buying a short sale home can be more trouble than pursuing a traditional purchase. The benefit is that you will be able to purchase the home at a substantial discount. We are going to list some tips that can make the purchase of a short sale home easier on both you and the seller.
- Locate Short Sale Homes – You can easily locate short sales in your area by using an online database, searching court records or from a real estate agent who may be aware of some listings that you aren’t. If you find a home that you are interested in, the first thing you should look at is how much the seller still owes on the home and compare that to the approximate value of the home. This can help you determine if the asking price is fair, or if the seller is trying to get more out of the property than it is worth.
- View The Property – By viewing the property you will be able to determine its condition and estimate how much work the property may need. If you feel that the home doesn’t need much work to make it livable, perhaps you have found the home for you.
- Secure Financing – In some cases, the lender who holds the original loan may be willing to finance you. They already have access to all of your information from the paperwork you’ve already submitted. If they feel you are a safe credit risk, you may be able to secure a loan from them.
- Prepare Your Offer – Once you have secured financing, you are now ready to submit an offer. This is usually something that you and your real estate agent will work on together to ensure that you are offering a fair price for the property.
Buying a short sale property can be an excellent way to get a great home for a low price. However, there are a lot of things that you need to be aware of before submitting an offer. Working with your agent you will likely find a home that you feel is an acceptable risk.