Short sale properties have gotten a great deal of attention from those looking to make fast money. While flipping a short sale may be popular, some buy them for their own residence. A short sale is a great way to get a lot of home for a good price.
In the Sierra Vista, AZ area, there are plenty of short sales to go around, but it is finding them and having a good representative to assist. These properties are highly sought after and the process is not like that of a typical home sale. Here are some tips on how to handle short sales.
Understanding Their Value
Short sales are priced below market value in an attempt to get rid of them quickly. These homes have mortgages on them and the owners are no longer able to pay their payments. Before they start showing the home to people, they must obtain authorization from the bank to sell below the amount owed.
The remaining balance will be forgiven and written off as bad debt. Many banks will allow people who are in financial turmoil to do this kind of arrangement to keep from paying expensive foreclosure costs. However, one must understand that the bank is not always easy to work with in these situations.
The Bank Makes All The Decisions
In a typical home sale, the owner will accept or deny the bid. In a short sale, the bank has the choice on whether the bid will be approved or denied. Typically, an offer that is made has 3 days to get a response, but when dealing with a short sale, it could be days, weeks or even months for an answer.
Because of this, so many people have shied away from the short sales thinking it was a risk. However, with renewed interest in flipping houses and those that are looking to get a great home for less, these homes have become highly competitive.
Making A Great Offer
When bidding on a short sale, you only really have one chance. You do not know how many other people are bidding and what their bids might be. If you come in at $10,000 below asking, and someone else comes in at full asking price, the bank is most likely to take full asking price.
It is also not a contract where little things like a refrigerator can be included. These contracts are straightforward and the property is usually “As Is.”
Taking The Gamble
It is a gamble to deal with a short sale home. The benefit is that the right deal can allow a family to live in a home that typically they could not afford anyway else. The key is not to become emotionally attached to the home until there is proof that it will actually be a distinct possibility.
Like most things, the real estate market can be a big gamble and it may or may not work out. It is important to have a good real estate agent working with a family and presenting their offers to the bank.