Should You Try to Buy a Short Sale Home?
A short sale means the seller is trying to get their lender to take less than what is owed on the home. For example, say the seller owes $250,000, but the home is only worth $200,000. If the seller cannot afford to pay the mortgage and cannot sell the home, it will go to foreclosure.
The banks do not want to foreclose on homes and have to deal with a lot of empty homes, vandalism, broken water pipes, tenants and other problems. They are in the money business, not the real estate business!
Short Sales are not short! They can take 6-9 months or longer to close and more often than not they never do close.
Enter, the short sale. The way this works is the seller has to convince their lender to take the “Short” amount instead of going through foreclosure. In our example, the bank might get $200,000 instead of $250,000 to avoid taking the property back.
Because of how complex they are, how long they take to get approval, and the relatively low success rate of completion, most first time buyers avoid short sales if possible. Most of the time, there are no repairs done for the buyer because the seller has no money and the bank won’t pay for them. Discuss the process with your Buyer’s Agent before you decide to make an offer to buy a short sale home.
Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.
Thinking of buying a home in the Portland, Oregon area? Checkout our First Time Home Buyer Classes!What's a Short Sale and Should I Buy One? ,
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