The housing market is in a unique position these days. For sellers, times can be tough as many foreclosures and short sales are available, bringing down home prices. For buyers and investors, now is a great time to potentially get a good deal. But, is buying a short sale really worth it?
A Great Deal?
By now you probably know that short sales can be a lengthy process, and one that is full of waiting to hear if the bank has approved your bid on the home. For some people, the up to four month waiting period is no big deal; for others it can be a deal breaker. Not only is waiting a problem when you may be required to vacate your current property, but there can be time limits on your loan that jeopardize the final sale of the property. Bank loan approval letters often give a 30-45 day limit to close on the property before the approval becomes invalid. With a short sale, you could easily be subject to reapplication procedures for your loan approval.
Waiting periods, strict and clean offer requirements and, in some cases, higher down payment and closing costs are all common deterrents for people looking to buy a short sale. However, they aren’t all bad news. Here is how to increase your chances at a smooth and successful short sale:
- Be sure you have enough cash to put towards down payment and closing costs before applying for a loan pre-approval.
- Get a loan approval letter and ask your potential lender for recommendations about buying a short sale.
- Work with a short sale experienced realtor to help you find the best deal and negotiate the sale.
- Present your highest offer the first time, making it as free from terms and conditions as possible.