Many buyers are surprised to find out that the short sale home they are thinking about buying is being sold in “as is” condition. There is absolutely nothing unusual about this stipulation in a short sale. It’s important for buyers to understand that in most cases they are saving a considerable amount of money when buying a home that is being sold as a short sale and this must mean that someone is taking a loss, in this case, the bank.
Believe it or not, depending upon the situation the lender could be allowing the home to be sold for as much as 50% of the amount that is owed by the current owner(s). This is especially possible if property values have dropped significantly in the area that the home is located. Many times in fact that is one of the primary causes of a short sale occurring in certain areas of the country.
As in any type of home sale someone has to “pay the bills”. In other words the commission, property taxes, escrow fees, title fees and other required expenditures must be paid by someone regardless of how low the selling price of a given home might be. Again, the bank is the one “taking the hit” in a short sale situation.
Now put yourself in the bank’s shoes. After all of this would you also be willing to agree to provide any type of guarantee as to the condition of the home to the new buyers? It is for this reason that the lender that has approved the short sale is most times completely opposed to making any repairs on behalf of the new buyers and that is why many short sales are being sold “as is”.
I have had a few sellers in the past ask if they are able to agree to certain repairs in order to complete the short sale of their home. This is not very common of course because the very necessity of a short sale is an indication that the current owner is in dire financial straits but the question has been raised. Due to the nature of this type of home sale the very mention of repairs by the buyer could be all that it takes for the deal to be rejected by the bank but it all depends on local, state and federal laws as well as what the bank and current owner are willing to agree to.
In a nutshell, each transaction is different and unique but it is fair to say that an overly demanding buyer of a short sale home is more often than not rejected by the bank based solely on financial reasons. It’s important for the new buyer to realize that if they are saving a considerable amount of money buying a short sale home than making some repairs themselves might be well worth the effort.
Again I stress that each home for sale is unique and there is no correct answer for every buyer or seller. All homes have some type of defect and even a brand new home is not going to be perfect. If one finds a home that is less money than other homes in the same area than being willing to make some repairs may not be such an unfair situation.