Considering purchasing a short sale? For many it’s a great way to break into homeownership and find a more budget-friendly deal – especially in a hot market like Denver. Here we’ll cover a few tips about the short sale buying process. If you think a short sale may be the right buy for you, these tips will help navigate the process.
What is a short sale?
Simply put, a short sale is the sale of a property for less than what the owner still owes on the mortgage. It’s an alternative to foreclosure when a homeowner needs to sell and can no longer afford to make their mortgage payments. Before you find the short sale property of your dreams, consider the following tips.
- Find out how much you can afford.
Whether you’re buying a cute fixer-upper or a turnkey single family home, you need to know how much you can spend. Contact a lender to get pre-approved for a mortgage loan. After answering a few financial questions, the lender will be able to tell you how much of a loan you qualify for. This step is crucial – not only will it help keep your budget in check, you’ll be able to put in offers in a timelier fashion if you’re already preapproved for a loan. - Find a professional experienced in short sale transactions.
Probably more than any other type of transaction, a short sale should be handled only by a real estate broker who has substantial experience with the short sale process, and a strong track-record of success in negotiating short sales for their clients. - Identify properties.
Your agent will be able to show you any short sale listing that lines up with what you’re looking for. Keep in mind these properties may be a great deal, but they may also be in need of repairs – sometimes minor and cosmetic, sometimes more significant. These brings us to our fourth tip, which is also very important. - Get an inspection.
An inspection will run you anywhere from about $300 to $500, but it’s a small price to pay if it saves you from unexpected expenses down the road. A proper inspection can tell you if you’re going to need something minor like new flooring or windows. It can also save you from extensive repairs that may not be in your budget, like a new foundation.
If you’re ready to start checking out short sales in the Denver metro area, contact Metrowest. We specialize in these types of sales and would love to help you start the process.