When a lender and a seller agree to release a mortgage for an amount less than what's owed on a house, it's called a short sale.
Can I get a good deal on a short sale?
Occasionally. Most people hear the phrase "short sale" and routinely think of a seller that is in default and must sell their home quickly to prevent further financial problems. This is occasionally the case and can be an opportunity for a buyer to make the most of another's misfortune. On the other hand, a lender may consider a short sale even if the seller isn't delinquent with their payments, but property values have declined. In cases such as these the discounted price may in fact be closer to current market values, not below.
How do I buy a short sale?
Prior to making any purchase offers, do your research. Using a knowledgeable real estate agent from Donovan Brothers Realty Inc. to assist you with researching a property will help you make educated decisions. We can help find out to whom the property is titled, the balance still owed to the lender, and whether or not a foreclosure notice has been filed. Locating this information can help you determine how much to offer.
Get a REALTOR® with short sale experience. The real estate agents at Donovan Brothers Realty Inc. can assist you in expediting the transaction and make certain you're protected. Don't let inexperience impede the closing process. Let our experience and knowledge work for you.
Even in the best of situations and with an experienced real estate agent, buying a short sale property will generally take longer than a typical real estate transaction. Be aware that a majority of short sales will not close in the customary 30 days or less. Remember that you're not only getting approval from the seller, but the lender must also agree to the discounted price. A lot of the time your offer will go before a committee to approve or disapprove which will add time - sometimes even 2 to 3 months.
Home warranties, buyer credits and allowances, and closing cost concessions are usually not up for negotiation when buying a short sale. The lender will sell the property "as is" which means the lender isn't going to pay for repairs. Be sure to reserve the right to have inspections for pests, HVAC, electrical, and other critical areas. At Donovan Brothers Realty Inc., when we write an offer, we're looking out for your interests first and will always advise you to make your offer contingent upon the inspection results.
If you're ready to buy, whether it is a short sale or a typical home sale, Donovan Brothers Realty Inc. is here to help. Use our experience and knowledge of real estate to be confident you are getting a fair deal and will be protected during the full process.
