A short sale occurs when a home sells for less than the seller owes on it. In this case, the bank agrees to the loss they will take by agreeing to the sale price. A short sale helps a seller avoid foreclosure which could ruin their credit report. Short sales can be a significant bargain, but in reality they are anything but short. As a buyer you will have to be very patient should you decide to purchase a short sale property. Not only will you have to agree to a price and terms with the sellers, but then the bank also has to agree to all of the same terms, which can take up to months. In addition, it is not likely that you will be able to write any contingencies into your contract. Any negotiation you want to do will probably not work in your favor since the bank will already be losing money and only cares about the bottom line. If you go the short sale route, keep in mind that just because you and the sellers agree on the terms of the sale doesn’t mean that the house is yours. Lenders approve less than 50% of all short sales, so you may spend months waiting on news only to be answered with a big, fat no.
If a short sale does work for you, be sure you are getting a clear title to your home. It is helpful to have a good agent and real estate attorney on your side to help you through all the contractual nightmares that a short sale can bring.
Short sales are not for everyone, but if you are willing to be patient then they can pay off big-time.
Thinking of buying or selling a home in Sussex County? Give us a call at Cooper Realty Associates and put us to work for you – 302-644-2266.