5 Things to Know When Buying a Short Sale
1. First off: do your homework!
The purpose of considering purchasing a short sale property is to get a great discount. However, many short sale homes can be very unkempt, to say the least. Not only can the buying process be timely, but you may also have your work cut out for you once you finally own the place. Therefore, it only makes sense that you determine what the property is honestly worth and whether you’ll be able to make a profit from it in the future.
2. Remember that the bank does not set the selling price.
The seller and the agent set the price, not the bank. This ultimately means that as a buyer, you must be patient. Though the bank does not set the initial asking price on a short sale, they have the power to accept or reject it. Further, because they’re not aware of the original asking price, this can be a long process, a process that can potentially take months.
3. Don’t be afraid to negotiate.
It’s very common for banks to come back at buyers with a counteroffer, even when they’re confronted with a good one. With this in mind, know how high you’ll go ahead of time, and don’t settle. There are other opportunities out there, so it’s not the end of the world if you have to walk away.
4. Keep expectations low for lowball offers.
Again, the banks are not immediately aware of the asking price on a short sale. This, in combination with the fact that we are experiencing a favorable buyers’ market, raises the chances considerably that a bank will shoot down a lowball offer. Even decent offers are shot down in the current market.
5. Don’t associate a short sale with a short process.
Often times a short sale can be anything but short, so don’t put all your eggs in one basket. Stay positive and consider other properties. In most areas it’s entirely legal to have multiple offers out, as long as the proper contingencies exist. Check with an educated real estate professional if you’re having any doubts.
Courtesy of bankrate.com and realtytimes.com
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