Buying a Short Sale – 3 Things you need to know BEFORE deciding to view short sales
You have come to the right place, as Short Sales are my speciality – I have a passion for helping homeowners avoid Foreclosure via Short Sales – So, of course, I also help those who want to Buy a short sale.
There are honestly a few things you should consider before making your decision to even view short sales as part of your home purchase opportunities.
1) Timing is the most important question for you. Are you looking to find a home and move into this home within anything less then 3 to 4 months from the time you make your offer? If so, Short Sales may not be the right choice for you. In most cases, not all of course – Short Sales take 90 days to get negotiated/approved and then it takes about 30 more days for the buyer’s mortgage to be prepared before settlement can occur. This could be a great opportunity, but not for those in a hurry.
2) Extra Closing Costs In most cases – Not all of course – Short Sales that are handled by experenced short sale processing/negotiating companies have a Buyer Negotiation fee that must be paid. This can be anywhere from $3000.00 to $5000.00. I believe $3500.00 should be the most charged for this service, but that is another conversation. So, if you do not have an extra $3500.00 on top of 3% closings costs – Then you will want to pick and choose which short sales you even view. (Those with additional Fee’s and Those without – Keep in mind if there is not a fee – These short sales are most likely being processed by inexperienced Real Estate Agents) That’s why they work for free. BUT, once in awhile experienced agents negotiate short sales without a fee too – The best course of action is to be working with a Buyer Agent that knows how to negotiate short sales so they can help you navigate the process and also assist the listing agent and/or understand how to push them when needed.
3) Are you looking for a Discounted Property? This is a Myth about Short Sales – There are NOT deep discounts given on short sales. Short Sales are sold at current market value in as-is condition. So, the entire point to buying a short sale is that the property is your DREAM HOME and location, style, and layout is what is the most important. If you are looking to get a discount on a property – Foreclosed Homes/Bank owned homes are where you should be looking, NOT Short Sales.
If you are okay with the above items – Then a Short Sale should be part of your home buying search.
Information is power – as long as you are aware of these up front then there will be no surprises…well, unless you are working with an uneducated Buyer Agent for your short sale purchase…because there is a right way and a wrong way to make an offer on a short sale too. One Hot Topic is having inspections done prior to written short sale approval – Click Here for a 6 min video about this.