The title “short sale” can be misleading because, at times, the process can by anything but short. However, for many it is a very rewarding purchase. It is definitely an option that should be considered if you find the home you’ve always been looking for that has the short sale stamp on it. Learn what a short sale is and what to expect, along with the pros and cons you should weigh when making the decision to buy one from your Denver real estate agent.
What is a Short Sale?
When you hear the term short sale, if you have never heard of them before it is easy to think “hey, this deal is going to go quickly!” Not exactly. A short sale essentially is a home that is being sold at a price lower than what is owed on the mortgage. This can occur due to homeowners who were no longer able to make their payments, or if their home is no longer worth what they paid. Ultimately this can happen when the value of the house has dropped. From there, homeowners who find themselves in this circumstance can reach out to their bank to get out of the situation with their lender. Or, in other cases, a homeowner simply wants to put their house on the market and it is worth less than what they paid. In most cases, people will want to list their house to make profit or break even. However, sometimes a hit has to be taken. This is where a short sale comes into play when the current homeowner works with the lender to sell a home for less than what’s on the mortgage—hence the terminology “short sale.”
What to Expect During the Buying Process
As you search, if you find a home that is a short sale, there are a few things to know. Because the homeowner must work with the lender on agreeing to sell the home at a lower price, it can take some time. In normal home buying processes, deals can close within 30 days. With a short sale, however, it can take months. If you are in a rush to buy, don’t necessarily write off a short sale, but just know that the process may take some time and you could consider how to manage the time if you need to move while the short sale proceeding s are in place. During the process, you will work with your realtor to submit and offer on the house. Usually once an offer is submitted, it will be under review at the bank. Given that the house is already being sold at a lower price as it is, if you are in love with the home, you are more likely to get it if you don’t throw out a super lowball offer. The work to finalize everything can take some time which is why it can take longer. Learn more about what to expect in Forbes’ What to Expect When Buying a Short Sale Property
Should you Buy One?
So, now that you know what short sales are, should you buy one? Ultimately that is up to you and what your situation is. If you need to move quickly and do not have a way to have temporary housing while the process is going on, it might not be the best option for you and your realtor can help you find a similar home that will fall into the normal home buying process. Next, in many cases these homes can be fixer uppers. This can be a dream for someone to get a house at a low price and make their own. Each home can be looked at on a case by case basis, and this is where your realtor will help you walk through the process so you can make the best decision.
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