Don't Buy a Short Sale Without These Facts
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If you've been looking at homes with a realtor, most likely he or she has mentioned a certain property as being a short sale. A home being sold as a short sale depicts a situation where a seller facing money problems is trying to avoid foreclosure by selling the property for below the outstanding mortgage balance. It's not uncommon to find a seller in this situation with a defaulted home loan.
Don't be fooled by the low market price of a home in this situation since they aren't always the best financial deal. The seller could have bought the home at the high point of the cycle and paid more than they should have, or the current real estate market may have forced property values to take a nose dive. As a homebuyer, you also need to be aware of extra costs not included in the properties selling price.
Don't get too excited if a seller accepts your offer immediately. You still need to wait and see if the mortgage lender will approve your offer, notably if they'll be taking a tremendous loss from the sale. The bank must consider the advantages of a short sale versus allowing the property to foreclose.
This process could drag on for several months with no guarantee the lender will take your deal, especially if the property has been listed and marketed at an unreasonably low price far below the outstanding balance.
If after weighing all the pros and cons of buying this type of property you still decide to pursue one, it's best to select a Realtor who's experienced in dealing with these type of properties. Your agent should do some research before you make an offer. It's imperative you know what the seller owes on the home; if it's a lot higher than what you're willing to pay, most likely the bank will deny your offer.
Your agent will also need to verify if there's more than one loan. If there is, you'll need the cooperation of each lender in agreeing to accept a payoff for less than the outstanding balance of their particular loan. With more than one lender, it becomes more difficult to negotiate a successful deal as all parties want to receive as much compensation as possible. To research how many lenders there are for a particular property, ask your real estate agent to retrieve the deed on the property.
Before pursuing a short sale, make it a point to ask your agent to contact the seller's agent and find out what preliminary short sale steps have already been taken. A bank will only consider accepting a short sale if the seller can document they are in financial straits. The fact of the matter is a short sale can't be finalized without the approval of the bank. Unless you're not in a hurry to buy a house, you want to be sure the seller has confirmed with the bank a short sale is a viable option. There's no point in wasting time pursuing a property if you're convinced the odds of having the bank accept a short sale are nearly impossible.
Article Source: Articlelogy.com
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