Buy a Short Sale Home
Search for distressed properties in your area and get details, photos, location map and contact information. Updated Daily.

Short Sale Homes

October 2010

Over the past few years, home prices in cities across the country have fallen considerably. While the decline in home values has been financially disastrous for many homeowners, it has opened the door for many prospective homebuyers and investors to purchase a home at a significant discount. One of the best ways to purchase a reduced priced home is through a short sale

Short sales are real estate transactions where the sale price of the property being purchased is less than its outstanding mortgage balance. This means that the transaction will not only involve the buyer and the seller, but will also involve the mortgage lender. Having a third party to accept a deal, adds a new dimension that can encumber and somewhat complicate the process. As a result, purchasing a home through the short sale route, may take much longer than a home purchased through the traditional sale process. In the end, though, the effort and patience should pay off handsomely.

Since buying a short sale home is more complicated than a normal real estate transaction, it may be wise to work with a Realtor with experience in those types of transactions. Such a Realtor should have an in depth knowledge of the short sale process, the mortgage lender’s motivations and the local real estate market. He or she should also be able to find all the homes offered for short sale in your area and determine which ones provide the best investment potential.

Once a home is found, the next step is to submit an offer to purchase. Deciding on the right price for a short sale is somewhat tricky. Keep in mind, that if you offer too low a price and it is accepted by the seller, the deal may still be rejected by the mortgage lender. So in order to increase your chances of acceptance by both the seller and the lender, you should offer a price that is in line with market prices. Considering that in many areas across the Country, market prices are well below what they were in the recent past, significant discounts are easily attainable. Also, keep in mind that many short sale homes can have multiple offers being negotiated on them at any one time. So, bidding unreasonably low may work against you, as you will not be considered serious by the seller and consequently excluded from negotiations.

After an offer has been accepted by the homebuyer, the mortgage lender and the seller, it is important to have a full inspection, an appraisal, and a title search done. It is common that homes offered for short sale are in a poor physical shape, often requiring a substantial outlay of money after closing. A professional inspection should determine the amount of required repairs and the cost associated with them. An appraisal should be ordered to verify that the purchase price is within range of fair market value. This will also come in handy if you plan on financing the purchase as it is a requirement by most mortgage lenders. Ordering a title search is important as well, as it will show if there are any outstanding taxes or liens against the property. It is to be expected that any home offered for short sale is likely to be burdened by unpaid taxes or liens which will become the responsibility of the purchaser after closing. Better to go into a deal with your eyes wide open than to be surprised by unexpected problems and expenses.

In conclusion, while buying a home via the short sale route is more complicated and time consuming, the benefits derived will far outweigh the effort and patience you will expend. Consider just three of those benefits:

1. The value in twenty or thirty years of every thousand dollar saved now because you purchased a short sale.

2. The future accumulated value of lower mortgage payments resulting from a smaller home loan. Lower mortgage payments also mean that you will have less stress on your monthly budget.

3. The peace of mind of knowing you bought a home that is not likely to depreciate in value.
Home reddotgif Login reddotgif Contact reddotgif About reddotgif Lost Access Code reddotgif Email Alerts reddotgif FAQs
Privacy Policy & Security Statement reddotgif Terms & Conditions of Service