House hunters might see a short sale they believe is a good deal and immediately want to jump into the purchase phase. While there’s nothing particularly wrong with this, short sales are different than traditional sales and come with their own set of advantages and disadvantages. A short sale may present a prime opportunity for some buyers. For others, not so much. Read on to learn valuable tips that may help you determine if buying a short sale is right for you.
First, what is a short sale?
A successful short sale means the seller’s lender is willing to accept a discounted payoff to release an existing mortgage. 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.
Get a pro on your side
Hire an agent experienced with short sales. It’s one strike against you if the listing agent has never handled a short sale, but as a buyer, it’s crucial to hire an agent who knows the ins and outs of the short sale process. Experienced agents can anticipate surprises and stop problems from happening.
Loan approval
Before a lender will consider your offer they will want to see that you have your own loan available and you are preapproved. Have a current preapproval letter for the lender, dated within the last 30 days. It will help if your agent sends a list of comparable sales that support the price you are offering to pay for the home.
Be patient
While the price of a short sale may be appealing, the buying process can be long. To help expedite, you can make your offer contingent upon the lender’s acceptance. Give the lender a time frame in which to respond, after which, you will be free to cancel. Some lenders submit short sales to the committee, but most can make a decision within two weeks to three months.
Think you might be interested in checking out short sale options in the Denver area? Give Metrowest a shout – one of our experienced agents would love to help you start the process!