Short sale transactions are growing in the US, and home buyers or real estate investors can take their advantage to acquire a home at lower than the market price. Although it is not always necessary to hire real estate agents for property transactions, it is different for short sale properties where an agent’s involvement is a must for sellers.
property as a short sale
To list a property as a short sale, sellers through their agents must furnish a hardship letter to the lender to substantiate the reason for short selling the property because of their inability to pay back and support it with appropriate documents like a bank statement loans information, etc. After obtaining a buyer’s offer, the seller will forward it to the lender through the agent, which, if acceptable, will trigger the process of negotiation.
Proper knowledge about buying short sale properties should help buyers to stay prepared about any uncertainty that can arise from the process..For appropriate education on short sales transactions, it is advisable to go through some tutorials like Phill Grove review that provides useful insights for a proper understanding of the process based on the ground realities.
Deal completion time
The process of buying short sales homes takes a longer time. It may even sometimes surprise buyers who, despite receiving a response from the lender after a few months, discover that it is far from an acceptance but a counteroffer that is much higher than what they can afford.
In addition in some rare cases, lenders might respond within a month or two, but going by the trends, six months or longer, is what buyers should be ready for. In other words The number of lenders stretches the time for acquiring the property, and dealing with a property mortgaged with a single lender is always a better option.
Getting a good deal
Short sales are good investments to make some good money, but you must do your homework well with proper guidance from your agent so that you are aware of the market conditions in that area. Data about recent transactions under similar categories with similar characteristics should help to understand the ground reality.
The price is a significant factor
Buyers may have to go through competitive bidding before the agent selects the best offer for submitting to the lender. Although the price is a significant factor, it does not always sway things in favor of buyers because there are other considerations like financing and terms. Sometimes a bigger down payment may influence the decision of accepting a lower price. Assuring extra cash for junior lien holders can also work in your favor.
As is condition
When buying a short sale property, you must pick up the property in the state it exists, which in real estate parlance is ‘as-is condition.’ It means that all repairing and upgrade that property needs are the responsibility of the buyer after acquiring the property. When placing an offer for short sale, you must factor the subsequent spending on the property to calculate the total cost of acquisition.
In conclusion Submit an offer only when you are ready with financing for buying a short sale property by fulfilling the conditions of your lender.