Before You Buy a Short Sale Property
In many cases, property buyers pursue short sales to grab better deals. They strongly believe that purchasing a short sale might present that opportunity. Therefore, whenever you see a property priced too low for a certain neighborhood, request your agent to get in touch with the listing agent and find out why the house is a short sale. You may want to think twice before you make an offer in any pre-foreclosure. It is not as simple as most people think, and just a few can close in a month or less.
What’s a short sale?
According to Gloria Nilson & Co. Real Estate in New Jersey, a short sale means that the property seller’s lender is willing to receive a discounted payoff and release an existing loan or mortgage. However, just because it is listed with short sale terms doesn’t mean that your offer will be accepted by the lender even when the home seller has accepted it. This is because even the seller must qualify for a short sale.
Keep in mind that the seller should not be in default of the mortgage payments. Otherwise, the lender might not consider them for short sales. In many cases, lenders opt for a short sale if the property seller is current, and the overall value seems to have fallen. Thus, the seller owes more than the property is worth, and this a discounted price can bring the price in line with the current market value.
Remember to check the public record
It is wise to do your research prior to making an offer. Your real estate agent can help you find details about who is in the title, the amount owed to the lenders and whether or not a foreclosure notice is already issued. These details will help you determine the specific amount you can offer.
Choose a real estate agent with experience in short sales
If the listing agent has never been involved in a short sale before, it is one strike against you. It is worse if your real estate agent isn’t experienced in this area. You shouldn’t go into a situation where you have the blind leading another blind. Therefore, it is in your best interest to hire an expert who is experienced in these processes and can anticipate surprises. He or she should be able to stop problems from happening.
Reserve the right to conduct property inspections
In most cases, the lender will not allow the property seller to pay usual items that other sellers are likely to pay for. These include property protection plans for the roof, buyer, pest or even termite inspections. You, the buyer, will be required to purchase the home in its current condition, and that means you will take care of all necessary repairs.
It essential that you get the property inspected by a professional. Therefore, you should reserve your right to this process before you agree to buy a short sale property.