Short sale properties can be a great deal – especially if you’re in a low-inventory area like Denver. But as with any type of real estate deal, it’s important to know what you’re in for. What is a short sale? In this type of transaction, it means the seller’s lender is willing to accept a discounted payoff to release an existing mortgage. Here are a few things to consider before hopping on the short sale wagon.
- Keep in mind that 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. That’s because sellers need to qualify for a short sale.
- Do your research before making an offer to purchase. Your agent can find out who is in title, whether a foreclosure notice has been filed and how much is owed to the lender(s). This is important because it will help you to determine how much to offer. Remember, banks are not under duress to accept a short sale so the offer needs to be reasonable.
- Don’t go into a situation where you have the blind leading the blind. You need an experienced short sale agent who can anticipate surprises and stop problems from happening.
- Once the seller has accepted your offer, the listing agent will it to the lender for approval. Remember, you do not have a deal until the lender accepts. Also, the lender will want a copy of your earnest money deposit and proof of funds. Don’t be surprised if the lender asks you to increase your sales price, and you’ll also want to have your mortgage pre-approval at the ready to prove that you can afford and are serious about purchasing a home.
If you’re considering purchasing a short sale, you’ll want an experienced professional to lead the way – that’s where Metrowest comes in. We specialize in this type of sale and would love to help you start the process. Give us a shout today!