As a mortgage debt solution, short sales are becoming increasingly popular. Bringing more money for the lender and less risk associated with foreclosure, short sales also have the potential to save neighborhoods from plummeting home values. Although not the preferred solution for the seller, a short sale can still help remove them from a bad situation and allow them a better chance at home ownership in the future.
As A Buyer
Short sales are great for buyers in many ways. The chance to purchase a home at less than fair market value is a buyers dream. However, the process isn’t always easy and there are several things a buyer must know in order to secure the property for the best deal possible.
A bidding war is highly likely. The reason that short sales are priced lower than fair market value is to spark interest and secure multiple bids on the home. The lender is hoping for a bidding war, which typically drives up the final sales price of the home. Buyers walking into a short sale purchase should offer a price that is as close to fair market value without compromising their opportunity to get a bargain. Short sales are not the time to place a low-ball offer and, in many cases, paying over the asking price is still more than a fair deal.
Also, offers without financing or closing cost conditions are more likely to grab the attention of the lender. Asking for closing costs, appliances or repairs tends to scare away the lender and could lead to the offer being rejected. If the condition of the home is up to standards and no major repairs are required, it is best to skip this condition altogether and write in an “as is” condition to the offer. Presenting a clean and simple offer with the fewest amount of terms and conditions is the way to beat out the competition.