Mortgage Fraud and News

What You Need to Know About Short Sales

Many owners choose to sell their home rather than having it foreclosed on or filing bankruptcy.  When their bank decides to allow them this option, the home can be sold at a price that is less than is owed.  This is called a short sale.  While this can give a buyer a very good deal, it is a process that some people are not willing to go through.  By understanding more about the process, however, you can make it through the process and get a good deal on a great property, whether you are an investor or a prospective homeowner.  What do you need to know about short sales?

You need to know that it can be a long process.  Most short sale properties take three months or longer for you to get the offer accepted by the bank.  This can put you four or more months away from closing on the property and moving in.  If you do not have this kind of time, then you will want to rethink putting an offer in on a short sale property.

Two parties need to accept the offer.  Even if the owner of the property accepts your offer, the bank still has to accept it.  While this may not sound like a big deal, you need to realize that the bank is losing money on the offer and, due to this, they take their time making their decision.  If you want to move into a property quickly, short sales are not the right choice for you.

Short sales are normally as-is sales.  Due to this, you want to be sure that you reserve the right to inspection and make that inspection contingent upon your offer.  This will allow you to find out what problems that property might have, so that you can determine if you want to undertake the issues.  By including this, you can protect yourself from a home that needs major repairs if you do not have the money to fix them.

Short sales can net you a good deal – if you go into them with knowledge and care.  By understanding that it is not a rushed process, that both the owner and bank need to accept the offer, and that you need to make sure your offer is contingent upon inspection, you will be able to make the most of the short sale process.  Whether you are an investor or want to live in the home, it is important to carefully consider the short sale process to protect yourself and your financial future.

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