Wednesday, September 26, 2012

Things to Know Before Making An Offer On a Short Sale Property



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Many real estate agents these days don’t even like to write an offer for short sales because right now national statistics show that less than 40% of all short sales actually make it to the closing table. This is because of more than one reason. First, lack of financing largely contributes to offers on short sales not being successful. Also, lack of cooperation from either side is also a reason for unsuccessful short sales.

Short Sales Are Often Better Deals Than Foreclosures
But some of the best opportunities in this market are in short sales – so if you are a buyer, here are some things to keep in mind when considering making an offer on one of these properties.
Contrary to what many buyers believe there are much better deals to be had in short sale situations as opposed to foreclosures. The main reason for this is that in the case of a short sale, there is much more time involved and discounts on the price of the property work to accommodate that extra time.

Some Extra Preparation Is Needed, But Not Much
Another problem that arises often is when buyers’ real estate agents advise their clients not to do an appraisal and home inspection during the process of buying a short sale. These two aspects are critical for the purchase of a short sale and can make or break your decision in a huge way. If you are unwilling to do either of these, it might be time to consider whether you are a good candidate to buy a short sale.

The reason I suggest having a home inspection and appraisal done ahead of time for short sales is mainly because of the time commitment it takes to do such a transaction. It is far more beneficial to learn ahead of time of any issues with the home or whether or not your bank would approve your home’s financing based on its appraisal. To go through months of processing only to learn that there is a problem that becomes a deal breaker can be avoided by getting these things done in advance.

Appraisals make sense because one of the biggest reasons that short sales do not go through is when the bank’s valuation of the property does not line up with the market value of the property. A way to avoid this misaligned value of the home is to get an appraisal done in advance so you know what you are dealing with.

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For more information on this or other short sale related concerns, I invite you to contact us today at 703.564.4026 or 301.660.6272.

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