3 Questions to Ask When Buying a Home in Short Sale

Dated: November 14 2018

Views: 163

Short sale is real estate lingo for a house that is being sold for less than the amount the homeowner owes on the mortgage to try avoiding a foreclosure.

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 a right real estate agent who's knowledgeable and have already dealt with the process before.

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.

Blog author image

Vanna & Co. Real Estate

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....

Latest Blog Posts

How to Keep Molds Out of Your Home

Mold is the last thing any homeowner wants to find in their home. It's not only unattractive and stinky, but it also poses a major health risk to you and your family. Checking gutters and

Read More

Numbers Don’t Lie – It’s Still a Great Time To Sell in Alaska

Numbers Don’t Lie – It’s Still a Great Time To Sell [INFOGRAPHIC]Some HighlightsHeading into the end of the year, you might wonder if it’s still a good time to sell your.

Read More

Knowledge Is Power When It Comes to Appraisals and Inspections in Alaska

Knowledge Is Power When It Comes to Appraisals and InspectionsBuyers in today’s market often have questions about the importance of getting a home appraisal and an inspection. That’s

Read More

Tips on Making A Peaceful Home

Many things in our world are beyond our control, but your home environment is one of them. There are a number of easy improvements you may do to bring some much-needed tranquility into your home.

Read More