While you may have heard about people getting great deals on homes through a short sale, you may not be fully aware of how this happens. It is true, short sales can get you a home at a surprisingly low price. In fact, the low cost of short-sale houses is often one of the biggest and only draws. Otherwise, short sales are notoriously complicated and frustrating to deal with. In a short sale, a homeowner is attempting to sell the home in order to avoid foreclosure proceedings. The homeowner usually owes more on the house mortgage than the actual value of the home. Selling the home will allow them to get out of the mortgage before they fall further into debt. So, the homeowner avoids foreclosure and the home buyer gets a good deal on the house. Sounds like a win-win, right? It is when it works out. Pursuing the purchase of a short sale house can end up being well worth it in home purchase savings, but it is not without its downsides.
What Are the Difficulties in Buying Short Sale Property?
One of the major difficulties, when you are pursuing the purchase of short sale property, is the number of players involved. Remember, the owner wants to sell the property to avoid foreclosure because they have fallen behind on a mortgage. This means that the mortgage lender for the homeowner will play a major role in the transaction as they have a vested interest in its outcome. An offer to purchase short sale property must not only be accepted by the homeowners, but must also be accepted by the mortgage lender for the homeowner and a number of other individuals who are associated with the mortgage lender. The time and complications involved in getting all of these people on the same page as far as an acceptable purchase price goes can be complex and take a great deal of time. The process of working towards a mutually acceptable purchase price for short sale property may take months and months.
Another big downside to buying short-sale property is the fact that the seller is usually in no position to negotiate contingencies on the purchase. The seller has already been granted a reprieve from the lender and is being allowed to sell the property to avoid foreclosure. Thus, the owner is generally not able or authorized to negotiate contingencies such as covering closing costs. It is also unlikely that the owner will be able to offer up repairs to be made to the home and property prior to purchase. The lender is not generally amenable to having the owner make any contingency offers that would effectively lower the purchase price further. This is especially true if any contingency would lower the purchase price below what the seller owes on the property.
Short Sale Bargains May Be Right for You. Let Us Help.
Short sales can be very worth it, financially speaking. A bargain on a home purchase can be a rare event and one worthy of jumping through some hoops. Our real estate counsel at M&A Law Firm will guide you through the short sale process and protect your interests throughout the transactions. Let us help you buy the home of your dreams under the best possible terms. Contact M&A Law Firm, P.C. today. We proudly serve Cook County and Skokie, Illinois.