Homes that are being sold at short sale are those where a homeowner owes more on his or her mortgage than the home is worth. Oftentimes, banks will allow homeowners to sell their property for less than what they owe because it allows them to divest themselves of the property and to avoid having to foreclose on it.
Short sales, on the surface, appear like a good deal for buyers. While there are indeed some benefits to buying a short sale property, there are just as many negative aspects to doing so as well.
One of the most attractive reasons buyers seem to find themselves attracted to short sale properties is because they are sold at great prices. Banks often allow homeowners to list their properties below market value because they see it as a way to ensure that the property will sell.
Many buyers perceive short sale properties more positively than ones being sold under foreclosure. With homes being sold at short sale, the owner typically lives in them up until they’re sold. In contrast, with foreclosures, they often remain abandoned, squatted in or they get destroyed by spiteful tenants. By the time homeowners move into foreclosures, they often have costly repairs to make.
Another benefit associated with buying a short sale home is that there’s often far less competition to buy these types of properties. Buyers are often turned off by the fact that banks must first approve a buyer for them to buy one. Many homeowners don’t want to wait for this to happen.
Some of the negatives associated with buying short-sale properties is that the process to buy one can take time. It can take months to close on your home. While the price may initially seem competitive, having to make alternate arrangements and pay to live elsewhere can ultimately make buying a short sale cost prohibitive for some.
A final negative aspect of short sale home buying is that while some homes may be in good repair, others may not. There’s no guarantee that a homeowner could afford to fix one thing to avoid something more complex going wrong down the road.
If you’re considering buying a short sale property, then a Maricopa attorney can better advise you as to what the process involves.
Source: Redfin, “The pros and cons of buying a short sale home,” accessed Feb. 23, 2018