As a homebuyer you might come across one or more properties that are classified as a short sale. A short sale is an effort by the current owner to sell their home in lieu of the bank repossessing it through foreclosure proceedings, thus partially salvaging their credit rating and lifting the burden of high mortgage debt.
The short sale process rests on the hope that the bank will accept a loss, approve the sale, and eliminate the expensive process of foreclosing and reselling a home. Since this is a huge hope to you as a homebuyer, you should understand some things in order to reduce the chance of being disappointed of unapproved short sales. The following are some tips to assist you:
- Remain positive and patient during the short sale process because it may take a few months to complete.
- Keep your options open and continue checking out several properties. Try not to get your hopes and heart set on one property. Remain optimistic, like all real estate the right property will come along.
- In most cases lowball offers get slow or no response. The bank is typically aware of the pricing during a short sale. When lowball offers stream into the bank they are often scoffed at and rejected, giving the prospected buyers little or no feedback.
- Don’t ask for repairs. Most banks will not pay for any repairs or replace unless they’re required by the lender in order to obtain an FHA or VA loan. And sometimes they will just ask buyers or sellers to pay for the repairs or even start marketing the property to cash or conventional financing buyers.
- When you get approval, it is imperative to close the loan on time. Unlike a traditional sale, there is no leniency with the closing escrow date.
Although short sales can be a wonderful opportunity to find your new home at a competitive price, a short sale can also be a major headache that may lasts for several months. It is important to have a clear understanding of the factors that lead to a successful short sale so that it can be an enjoyable and profitable experience.