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3 Questions to Ask When Buying a Home in Short Sale
If the homeowner is behind payments, experiencing financial hardships with no significant assets, and the house is underwater, they can pursue a short sale.
It is usually an option for lenders to save the time and fees that a traditional foreclosure would entail, so they accept the short sale. The remaining balance is shouldered depending on the agreement made by the lender and the homeowner.
So if you are buying a home in a short sale, what's in it for you and what are the things you need to know?
How to make an offer on a short sale?
The best tip is to choose
You both need to find out how much the homeowner still owes on the property and find out if you can match your offer to at least 80% of that amount. This value is dependent on the property's appraised market, which your real estate agent would know. Be sure to check comparables before submitting any offer.
Find out if there's more than one loan the owner took on the property because you will need an approval of all affected lenders in closing the sale. The more lenders involved, the harder the closing will be.
Lastly, make sure the seller has contacted the bank and confirmed that the house is approved for short sale. This can help you save lots of time and effort.
What to expect?
Sending an offer for a short sale is like a race. You will have a better chance if you are one of the first ones who submitted an offer.
The property is sold as-is, meaning you get exactly how the property is at the time you submitted the offer. There is no time for repair or price reduction negotiations.
Since the house is already at an incredibly low price, you may need to pay a part of the real estate agent's commission out-of-pocket. You may also need to shoulder the closing costs.
Is it worth it?
Houses under short sale may have incredibly attractive low prices, but they surely involve extra work and hassles compared to traditional sales.
But the question is, is it worth it? Well, it depends on the property itself. That is why it is important to get some help from professionals who have a better understanding of the process and the market.
Buying short sale houses can be a great opportunity for a major headache, but with the right help, it is assured that you can remain positive and optimistic throughout the process.
If you are looking for some help to purchasing a home in Alaska, call us (907) 570-6757 or 907-720-4663.
Vanna has called Alaska home for the past 15 years. As a mother, real estate investor and previous business owner, Vanna brings many different perspectives when working for her clients. She has been a....
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