Buying a home is a big deal. It is a large financial investment and the place you plan to make lasting memories with friends and family. When beginning the search for a new home, consider all of your options. Think about how much time you have or want to spend looking for or closing on a new home. Think about how much you are willing to spend and how important a “good bargain” is to you. If you are under little to no time constraints and are willing to spend more time if you will save more money, a short sale may be a good option for you. Short sales are often complex and involved transactions. Consult with the residential real estate attorneys at M&A Law Firm, P.C. to find out if purchasing a short sale house will work out in your best interest.
What are the benefits and disadvantages of buying a short sale property?
Short sales occur when homeowners want to sell their home in order to avoid foreclosure on their property which will wind up on their record. In these cases, the homeowner owes more on the house than the house is worth. To be eligible for a short sale, the owner must be able to show the lender a type of hardship, such as:
- Loss of income
- Physical illness
- Mental illness
The lender will usually approve the property for short sale if the owner is not yet in default on their mortgage and can show that they lack the ability to make timely payments which will soon land them in default.
One of the major benefits to successfully purchasing a short sale property is that you can get a great deal on a home. This benefit, however, comes at its own price. The purchase of short sale property can take a very long time. Your offer to purchase the home must be accepted by the homeowner and then approved by the lender. If there are several lenders or lienholders, all of them must agree to the short sale purchase.
Additionally, the lender is unlikely to approve any adjustments to the purchase price or sales contingencies as they are already accepting an amount lower than what the seller owes. Do not expect for a lender to pay for:
- Needed repairs found in the home inspection
- Any pest control issues
- Roof repairs
- Home protection plans
You also need to watch out for the lender reserving the right to renegotiate the terms of the short sale up until the very last minute.
Protecting Your Best Interest in Residential Real Estate Transactions
If you are interested in purchasing short sale property, make sure you are actually get a good deal. Contact the knowledgeable residential real estate attorneys at M&A Law Firm, P.C. today. We are here to help make sure your home buying experience has a positive result.