Is a Short Sale Right for Me?
As the housing market cools and the economy finds itself on less sure footing, we might begin to see the tell tale sign of a down economy—short sales. In the subprime mortgage crisis, roughly 25% of homes on the market were short sales, inspiring investors to snap up those homes—sometimes to flip, sometimes to rent out. While we are nowhere near that kind of recession, we may start to see more short sales coming on the market.
How do you know if a home is a short sale?
You can look for a few key indicators, like a note in the description that says “subject to bank approval,” but the best possible way to find those elusive listings is partnering with a broker who has experience in short sales. Chris Speth, one of our partners, has many years of experience in hunting down short sales and is a great resource for helping you fix it up if necessary.
What to expect when buying a short sale?
They look like any other home and are listed almost like any other home, so where does buying one feel different? As you might expect, the differences really show up when you are going through the negotiation process since you are negotiating with the seller’s lender as well as the seller themselves. This can be particularly difficult because the seller might accept your offer, but their lender might reject it, and that may only happen after a lot of time has passed. This back and forth can take much longer than you expect. It may also take much longer to close on the property since, as a business, the lender will take more time to get things done than a person would.
Why buy a short sale?
For some who are looking to get into the market, a short sale may be priced more affordably, helping your first downpayment go farther. Just keep in mind that negotiations and closing will take much longer. Or if you are an investor looking to add to your portfolio, short sales are a lower cost way to do so.
In the end, as with any real estate transaction, it’s all about whether the home is a good fit for you and your family’s goals. If you would like to learn more about short sales or you need help buying or selling your home, our agents can help. Reach out today.
ADDITIONAL RESOURCES:
https://www.investopedia.com/terms/r/real-estate-short-sale.asp
https://journal.firsttuesday.us/real-estate-knowledge-explained/short-sales-explained/