Although a short sale may indicate tough times for the seller, avoiding foreclosure is generally a positive thing. For buyers, short sales mean big savings and a great deal on a home. However, there are some things to consider before taking the leap into the short sale market.
Short sales are known for their lengthy purchase process. Since the bank stands to lose money by allowing a short sale of a home in default, they often play hard ball with potential purchase offers in attempt to get the most money for the home. This is why they will collect multiple offers and sit on them in order to get the best deal. Many lenders will deny offers with conditions like closing cost assistance or financing approval. If you are still thinking of pursuing a short sale here is how to get a leg up:
- Get pre-approved for your loan before placing an offer.
- Present your best (highest price) offer the first time.
- Keep your offer clean of any conditions, like closing costs or financing.
- Be patient.
Short Sale Alternatives
You may not have the time to wait on a short sale negotiation, but that doesn’t mean you can’t still find a great deal on a home. Look for homes in areas that have a higher number of short sales. Often, homes in these areas are priced lower due to the devaluation effect brought on by the nearby short sales. Consider buying a fixer-upper, many homes in need of some renovation can be bought at a great price and then turned into your dream home.