What to Expect When Buying A Short Sale

Dated: 02/21/2013

Views: 617

If you are looking for Charleston properties, chances are you’ve noticed a lot of talk about short sales. Short sales are properties being sold “short” of what the owner owes. Sometimes you can get these homes for a price under market value, but before you put an offer in on a distressed property, weigh your options.

 


Time

A short sale can take longer than a conventional sale to close. In fact, several months of waiting are typical with some banks before they reply to your offer. Be sure to avoid an agent or negotiator who is either inexperienced or too busy; we have heard horror stories about waiting a year or more! In a short sale both the homeowner and the bank both have to approve the purchase price. Usually the homeowner gives a quick answer but the bank goes through a process to determine their “bottom line” and that process takes time.

Money

Yes, you can likely get a good bargain by purchasing a short sale, but keep in mind that often the bank counters the offer. Banks are looking at the short sale as a business move and they have to net a certain amount of money, which may be higher than your offer. Don’t be surprised if your offer is accepted by the homeowner but countered by the bank.

Repairs

In a conventional sale, homeowners have the opportunity to ask for repairs if problems come up in the home inspection. Since short sale properties mean that the homeowner is financially distressed, they usually do not have money to pay for repairs to the property. Short sale properties are sold “as is,” so plan on being responsible for all repairs, major or minor.

Certainty

After a wait and even great progress through the short sale process, sometimes the property still goes through foreclosure. While we as real estate agents work to get short sales approved (which benefits both the buyer and seller), sometimes circumstances are out of our control such as liens or past taxes due. An experienced agent can hopefully find out these issues in advance while other agents find these ghosts when it’s too late. My advice is to not get attached until the deal is finalized.

 


In conclusion, short sales can be a great way to get your dream house, but be prepared for the process. Make sure you have an expert short sale negotiator on your side who will keep you informed through the purchase. Short sales are a special type of property so you want to work with a real estate agent who has ample experience and a track record of quick, successful closings on short sale properties.

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Hank Johnson

Hank Johnson, a graduate of The Citadel, has a proven track record as a CFO, businessman, Entrepreneur and real estate investor. Hank has been active and successful in the Charleston community for ove....

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