Buying a Short Sale Home – What You Need to Know

We often come across signs put up on some properties announcing a ‘short sale’, and it makes us go drooling, brewing up a picture of gains and profits we could make out of the deal. However, the world of real estate short sales isn’t as sweet and simple as we imagine it to be, and if we don’t tread carefully, we could end up getting cheated, or maybe paying more or doing something that could have been done a lot better had we treaded more carefully and made a more informed decision. Here we list some eye openers for you, so the next time you see the ‘Short Sale’ signboard, you know exactly what you are getting into and what to do. And if you yourself have to put up that signboard, you know how to get the best deal the best way.

buying a short sale

There is nothing short about a short sale

A short sale means the property is being sold short of its actual price, so the owner incurs a loss in order to be able to clear the dues he has on the property. It doesn’t mean that the sale will be only for a short time, or there is a special price for a short time.

Mostly, you might need expert guidance

Nothing wrong in hiring a capable and experienced real estate agent who is well-versed with the process of real estate short sales to help you out with buying/selling in a short sale.

Short sales involve third parties

A short sale needs to be approved by the lender whose dues the seller is clearing with the sale. It is not like a normal real estate sale.

Get your facts right

Before you put up a property on a short sale, or plan to buy one being short sold, make sure you have gathered all the financials and have got a good understanding of the local real estate market. It will help you gather insights on where you stand, how short things are and what is the best course to take.

Short sale needs to be staged too

Short sale may sound like something done out of desperation sometimes, but that doesn’t mean you can sell off property in any condition. A clean, uncluttered property would sell out much faster and perhaps even a better rate than a dirty, congested property. If you can take the expense, staging the property might not be a bad idea too. Marketing the short sale is also essential.

Negotiation is difficult

We often assume that a short seller would be less concerned about the price he is getting, he is selling short anyways, however, that is a misconception. The seller has a debt to pay and so he or she would try to maximize the selling price as much as possible, not so he can make a profit, but so he can clear his mortgage.

Quality is not always questionable in short sales

Just because a property being short sold is of poor quality or has a defect or there will be a catch. The property could be perfectly alright in a large number of times. A short sale may not really have to do with quality, it could be some other reason entirely. So short sales are trustworthy if treaded carefully.

Real estate short sales could be quite beneficial and helpful for both buyers and sellers. If one gets their facts right and makes informed, well-thought decisions, it could be a smooth and good transaction.

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