All About Short Sales
As the real estate market in West Palm and beyond struggles to recover from the housing crisis of 2008, foreclosures, short sales, and distressed properties still tend to plague the local markets. While the short sale transaction has been around as long as mortgages have, the sheer volume of them during the most recent recession familiarized the average American with the concept. Caught unaware, both lenders and real estate professionals scrambled to find their places in the process, with many becoming overnight experts. Here, we have tips on moving to West Palm and buying a short sale.
Sellers typically agree to short sell a house as a way to avoid foreclosure. This is because they’ve bought into the myth that a foreclosure is worse on their credit than a short sale. Unfortunately, the impact is the same on your FICO score. Buyers, on the other hand, have been inundated with news stories about deeply discounted prices for short sale properties – so much so that some buyers insist on being shown short sales instead of traditionally listed properties. The price difference can be massive, having a detrimental impact on fairly priced, financially maintained properties.
The first step to take is to find a knowledgeable real estate agent. Yes, it may be a bit of a challenge, but short sales are quite different than standard purchases, and you need someone experienced and well-versed in the short sale process. Real estate agents love short sales because they have a better shot at getting the listing than they do if a house is bank-owned. Find one with short sale knowledge as well as general real estate buying experience.
Then comes the financing process. Visit lenders to find the best rates and terms. Although short sales are notoriously slow, once your offer is approved by the seller’s lender the pace may pick up, and you want to be ready to close when it does. This process goes for all sales, not just short sales. You always want to be pre-approved and ready.
Make sure the home inspection is done and tells you what kind of repairs the property will need. A short sale at a bargain price that needs extensive work could be way more expensive than a regular sale that has been well maintained. Ensure that your agent includes language in the offer that allows you an out under certain circumstances.
Keep looking. As with home buying in general, putting all your eggs in one basket could leave you disappointed and without any prospects. Other people are interested in buying, and if they have a better offer, an all-cash offer, or have a more cutthroat real estate agent, you could lose out on a property. Your best bet is to have another one waiting in the wings.