Pros and Cons of Purchasing a Short Sale
When shopping for a home, you may notice that certain listings are labeled as short sales. This means the seller is upside-down on his/her mortgage and is attempting to negotiate a deal with the lender in the hope of avoiding foreclosure.
In this type of sale, the bank(lender) agrees to accept less than the amount owed on the mortgage. The transaction benefits the bank by allowing it to avoid repossessing the home in foreclosure, which is expensive and time-consuming, and it benefits the seller by allowing him/her to avoid the negative credit ramifications of foreclosure (and the bankruptcy that sometimes accompanies it.)
If you're interested in buying a property that's listed as a short sale, here's what you need to know:
- You may be in it for the long haul! The "short" part of the name refers to the lender being shorted on the full amount owed on the outstanding mortgage. The process time varies depending on a number of factors. In my experience, I have seen short sales close in as little as 45 days and as long as 8+ months.
- The home is usually sold "as is"
- Turning on utilities for any inspections may be the responsibility of the buyer.
Think you may be interested in purchasing a short sale? Give me a call and we can review your options: 251-367-1318.