What is a short sale?
Simply put, a short sale is the sale of real estate where the owner owes more to the bank than the property is worth. A short sale allows owners to make a sale rather than going through foreclosure and is significantly less damaging to their credit score.
As a buyer, here are some factors to consider when making an offer on a short sale property: 1) Despite their potential advantages, short sales have a downside. Once you make an offer and the owner of the home agrees to sell it, the waiting game begins. The offer/sales price must be approved by the bank/lender. And that can take weeks or even months. During this period, buyers may not hear anything and when they do if may be a counter-offer. If you are not in a position to wait an undertermined amount of time for an answer, better to consider a house that is not a short sale. 2) Short sale offers are commonly made as-is, and generally won't consider repairs. As a result, properties should be inspected so you'll be aware of any issues that might pop up in the future that may prove costly.
3) A title search is also recommend to see if there are any other liens on the property in addition to the first lien. 4) Be cautious about bidding too low. Be sure to use the services of a Realtor® to help you determine the best offer to make. Banks may want to sell, but they won't accept too poor a deal, so bids should still be reasonable for the market conditions. 5) And finally, considering the amount of time a short sale takes and the uncertainty that a deal will be finalized, you may want to consider alternative properties in case your offer is not accepted.
Our experienced Coldwell Banker Willis-Smith agents understand the process for buying short sale properties and are ready to assist you. If you would like information about Short Sales, please contact us at 800-334-0792 or online.