In the time of COVID-19, you may have heard the term “short sale.” What exactly is it and is it something you could be interested in? Why would I buy or not buy a short sale property?
A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, then all is good to proceed with a successful sale of the property.
How Do I Buy a Short Sale?
For the buyer, the short sale process is much like a traditional purchase with some exceptions, the most significant being time. A typical short sale can take anywhere from 4-8 months to close. Unlike the name implies, it is not a quick process. Currently our team is experiencing a 3-4-month processing time for a majority of short sale approvals. It is highly recommended that buyers hire a real estate agent when purchasing via short sale.
Pros and Cons of Purchasing a Short Sale
Cons:
It is a very time-consuming process and is not recommended for buyers on a time crunch
Property is sold “as-is,” meaning the seller will not do any repairs prior to closing
The lower price is not always worth the condition of the property, as it may require costly renovations or upgrades
Inspections are a must when purchasing a short sale and the buyer will acquire that cost
Pros:
There is less competition when putting in an offer on a short sale property
The extra time needed for processing allows the buyer time to secure additional funds to make desired improvements
The property could be the deal of a lifetime
With this information, you are now equipped with the knowledge to decide whether you’re up for a short sale purchase. If you decide to move forward with this process, remember that we have short sale experts in our office to walk you through each step of the way.
For more information on short sales, reach out to our team via phone or email, and we would be happy to talk you through all of it.
Happy Hunting!