Each year, hundreds of thousands of homes are placed on foreclosure or short sale lists. With so many homes on the market, there’s an incredible win-win opportunity for both sellers and buyers to get the best deal possible on a home. However, while short sales are an excellent solution to alleviate or solve mortgage debt problems, they poise their own complex problems as well. By remembering these considerations, homeowners and buyers will be able to avoid common pitfalls and gain the maximum benefits from their short sale efforts.
How to Ensure Short Sale Success
Just because a short sale seems like a success on the surface, long-term considerations may change how you view the deal. By being thorough from the very beginning of the short sale, you’ll ensure terms that are favorable for your situation. This will not only help solve any outstanding mortgage debt situations, but keep both parties happy.
1. Don’t ignore property problems. Neglect for mold, leaks, and other issues with the home change the condition of the property. Remember, older homes usually have costly renovations. Buyers should investigate property problems through a home inspection – after all, they’ll inherit any problems with the property. On the other hand, homeowners struggling with mortgage debt might be too strapped for cash for even the most basic maintenance considerations.
2. Work with the seller. Short sale buyers need to stay in constant communication with the seller. Why? Because the seller is trying to appease their lender and their mortgage debt through the short sale. They will need certain paperwork and documentation to appease the lender. By making the process easier for the seller, potential buyers have a greater chance of their offer being approved.
3. Leave enough time. Short sale buyers have the tendency to assume that the process will move quickly. However, because short sales are appeasing mortgage debt, they don’t close as quickly as traditional real estate sales. Keep this in mind when planning a purchase.
4. Don’t fall in love with a bad home. Whether it’s the location, neighborhood, or the greater community, there are many people who fall in love with a bad home. By remembering that your home is essentially an investment, you’ll be able to avoid the temptation to purchase a “bad” home just because the short sale is a great deal.