Should I Buy A Short Sale? Maybe…

What Is A Short Sale?

A short sale is the sale of a property by a financially distressed borrower for less than the outstanding mortgage balance due where the proceeds from the sale will be used to repay the lender. The lender then accepts the less-than-full repayment of the mortgage (and the borrower is released from the mortgage obligation) thereby avoiding foreclosure.

What Are The Benefits To A Short Sale?

A short sale benefits the lender by allowing them to avoid repossessing the home in a foreclosure action which can be more expensive than a short sale.  The seller benefits by avoiding the credit problems that accompany a foreclosure proceeding. The buyer can benefit by purchasing the property at a “below market” price.

How Does A Short Sale Differ From A Traditional Sale?

Since the lender has not foreclosed they don’t own the property, however because the lender will be taking a loss they must approve all aspects of the sale. In a traditional sale the seller approves or rejects the terms of the purchase agreement but because the lender is in control of the process the short sale will take more time to complete than a traditional sale or the purchase of a foreclosed property.

How Long Does It Take To Close A Short Sale?

All short sales are unique and the time to close depends upon many factors including the particular circumstances of the seller, the mortgage servicer, investor/s, etc. While there is no standard time period it is safe to say that short sales take a longer time than traditional sales. A buyers patience will be tested repeatedly during the short sale process which can last several months under the best conditions. Two lenders, ( a first and second mortgage), can further extend the time needed to close the sale. So if you are looking to move into a home quickly, with a minimum amount of frustration, a short sale probably isn’t for you.

What’s The Down Side To A Short Sale?

While a short sale property is generally in much better condition than a foreclosed property you will be purchasing the property “As Is” and it is unlikely that the lender will make repairs and doubtful that the seller will have the funds to do so.

The extended time period needed to complete the sale is probably the biggest issue but there is also the chance that after several months of hard work, a thorough understanding of the process, an experienced and talented agent and a willingness to wait, the lender will not always cooperate and the sale may not close.

How Can I Improve My Chances?

Closing a short sale is one of the most difficult processes in real estate and  requires an agent that is detail oriented, patient and a skilled negotiator. Work with an experienced short sale agent, someone who has successfully closed dozens of short sale transactions

How Do I Get Started?

Call or email Nancy (602) 793-1627 Nancy@NancyLaswick.com