Even though there aren’t as many short sales available as there were before there are still a lot of good deals for home buyers if they know where to look. Because a short sale requires the final approval of the lender buyers are actually negotiating more with the bank and less with the actual sellers. Keep in mind that at this point the bank basically has two options available to them. They can either accept the best offer received as a short sale or they can allow the home to go into foreclosure and adding another home to their inventory is the last thing that a bank wants to do.
Although buying a short sale home usually takes longer than a traditional loan there are four big advantages that home buyers should be aware of.
First and foremost a short sale can often be purchased for less money than other comparable properties in the same area. This alone is a great reason to check out properties in your target area before deciding on the conventional route. Keep in mind, with many homes being sold some sellers are willing to wait to get the best price that they can but in a short sale the lender wants to sell quickly and is willing to consider any reasonable offer.
For price conscious home seekers short sales may be less competitive than looking at foreclosures. As a realtor I can assure you there is no shortage of professional investors looking closely at foreclosed homes. They are often able to offer cash for a given property and that gives them a lot of leverage compared to the average home buyer. Some investors don’t like to deal with short sale homes because they want to “flip” a home as quickly as possible and short sales often take longer to get to the closing table than other types of transactions.
It may surprise you to know that it is usually easier to finance a short sale than a foreclosure. Many foreclosed upon homes require the buyer to pay cash, especially if the property is in very poor condition. I recommend that home buyers get their finances approved before they attempt to make an offer anyway so if you are pre-approved for a home loan a short sale is one possibility to consider.
Did you know that in some cases a full inspection of a foreclosed property is not permitted? In the case of a short sale the current owner is more likely to allow an inspector in their home. Remember, they need to sell and are usually willing to cooperate. Although the owner is required by law to provide a list of all known issues about the property, nothing compares to an actual inspection performed by a professional.
So now that you’ve decided to check out some short sales in your target area, where do you start? I suggest that you find a local realtor that is experienced in short sales and knows the area that you are interested in. This person will know the market and can advise you whether a property is fairly priced as well as being able to answer questions about the neighborhood and surrounding areas.