Tips for Short sale buying
Foreclosures are on the rise, more and more homeowners are considering a short sale on their homes. If you are a potential home buyer or investor, short sales often reveal discounted prices and great bargains on homes. You can profit from short sales if you know what you’re looking for and how to go about the process.
What is a Short Sale?
A short sale is a pre-foreclosure transaction in which a lender agrees to allow the sale of a home for less than the amount owed on the mortgage. Short sales can help prevent a foreclosure if the lender will allow it. A short sale can benefit the homeowner as well as the lender. The lender can avoid the lengthy process of a foreclosure and the expense that goes along with it. The homeowner is able to possibly save their credit from long-term damage and rebuild their life without a foreclosure hanging over their head.
Wait for the Right Opportunity
As a real estate buyer in , it may take some time to find a short sale that fits your needs and budget. But be patient – look for short sale opportunities in neighborhoods that interest you. Also, use the services of an real estate agent that specializes in short sales and foreclosures. A real estate agent can help you find short sale opportunities and guide you through the entire process. Keep in mind that every decision must be approved by the lender so it can take some time to get answers from the seller.
Inspect the Home from the Start
You might not get a chance to schedule a comprehensive home inspection before buying. If possible, take along an expert when you first view the home to help you determine the true value of the property as well as identify any hidden problems such as roof or floor damage, leaky pipes, etc. These repairs can cost you more than it’s worth if you’re not careful.
Obtain Title Insurance
Be sure to buy title insurance before purchasing a short sale property. The title insurance company will research the property to uncover any judgment liens, back taxes, or other debts on the property. These will automatically become your debts if you go through with the short sale blindly!
Beware of expensive Short Sales
Some short sale homes are not bargains at all. Regrettably, some homes are priced far above market value even when facing foreclosure. This means the buyer likely paid an inflated price for the home to begin with, or that the area where the home is located has experienced a drastic drop in real estate value. In this case, you will actually lose money by purchasing the home.
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