Why is a short sale bad?
Short sales are a mixed bag for the buyer, the seller and the lender. If you’re a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You’ll also walk away from your home without a penny from the deal, making it difficult for you to find another place to live.
Is it a good idea to buy a short sale house?
Buying a short sale can be a great opportunity to get a property at a reduced price, but it can also have its disadvantages. Purchasing a short sale is a more complicated process than a typical home sale, so there are some unique risks involved when investing in this type of investment property.
What are the pros and cons of a short sale?
The Pros and Cons of Buying a Short Sale
- Short sales can take a long time.
- They are sold as-is.
- Make sure the lower price is really worth it.
- The good deal factor can be influenced by the market conditions.
- Less competition.
- Don’t overlook needed repairs.
- Home inspections are a must.
- Research the community, get neighbors’ opinions if possible.
Who pays closing costs in a short sale?
These seller closing costs include things like property transfer fees, realtor commissions and attorney or title company fees. In a short sale transaction on the other hand, the seller’s closing costs are usually paid out of the money the buyer brings to the closing.
What is the downside of a short sale on a home?
The cons of buying a short sale
Despite their name, short sales are usually not short. Because all the seller’s creditors have to approve the offer, escrow often drags on for months—with no guarantee the sale will be approved. Sometimes it’s not worth the wait.
Can you negotiate short sale price?
Can You Negotiate A Short Sale? It is entirely possible to negotiate a short sale, but doing so can be a time-consuming process. Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too.
Do short sales go for asking price?
If the short sale house is on the MLS, it will be listed with the seller’s asking price. Typically, this price will be at varying levels below the market value. How low the price is depends on how long it’s been on the market and how many offers it’s received.
How long does it take to close on a short sale?
Once an offer is received and signed, I send it to the bank, along with the seller’s short sale package and a prepared HUD. From that point to the time of short sale approval, the average timeline is about 60 to 90 days. It means 30 days to sell + 60 days for approval + 30 days to close escrow = 4 months, on average.
How can I speed up a short sale?
Speed up your short sale closing date by making your offer as free of contingencies as possible. Submit your mortgage approval with the offer. Contribute a substantial deposit to show your good intentions.