5 Important Facts before You Buy a Short Sale

Here are several important facts to consider before you buy a short sale, which is a very complex real estate arrangement.

1. Value of the Home

Before you get involved with a short sale, you need to make sure that you know the approximate value of the home that you want to buy. This can be determined by looking at comparable sales in the area. Looking at pending sales is also a good indicator of what a short sale should be priced at. Short sales typically have to be sold a little below market value in order to entice buyers. This is probably the reason that you are attracted to a short sale in the first place. However, if the listing price is too low, the lender will never accept it. The price that you pay for the short sale has to be at least in the vicinity of market price. 

2. Mortgage Specifics

When you are about to buy a short sale property, you need to familiarize yourself with the current mortgage situation on the property. You need to know how many mortgages have a claim on the house and in what amounts. Your real estate agent should be able to obtain this information for you. If they are experienced in short sales, they may also be able to tell you whether the lender is easy to work with. Some lenders have negative reputations when it comes to negotiating short sales. This information could help you determine how much you need to offer on the house. 

3. Listing Agent History

A short sale is typically a very complicated transaction to complete. You want to work with a listing agent that has successfully seen several short sales all the way through. If the agent has never completed a short sale, then there is a good chance that your sale will also not go through. 

4. Short Sale Package

Before a short sale can go through, the homeowner must complete a proper short sale package. This package of information helps to determine whether or not they are eligible for a short sale. This information includes a hardship letter, their tax information, pay stubs, and their bank statements. You and your real estate agent should be able to determine whether or not they stand a good chance of being accepted. 

5. Other Offers

When you are considering whether or not to make an offer on a short sale, it helps to know how many other offers there are. If you have several offers to compete with, you know that you should most likely offer a higher price for the property. 

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