What Is A Short Sale? Albuquerque Home Buyers
Many Albuquerque home buyers may ask “What is a short sale?” First thing to understand is a short sale does not mean it takes a short time to get the deal done. A short sale means the lender that carries the mortgage will receive a short payoff. A short sale occurs when a home is worth less than the mortgage on the home and the costs to sell the home.
A short sale must be approved by the home owners lender. Each lender has different rules and processes to approve short sales. On most cases, this approval process will take 2 to 4 months. Then the buyer will need about 30 to 45 days to close on the transaction. Home buyers considering a short sale need to have a lot of flexibility in the schedule to move into a home. If you can’t wait several months, a short sale is not a good fit for you.
A short sale should be viewed different for home buyer and home sellers. There is a major distinction in short sales, has the list price of the home been approved by the lender. In many cases the lender will not provide assistance in pricing a home to the listing real estate agent. Therefore the real estate agent will make up a price and list the home. It is important to understand the lender may not accept the list price and may want more than the list price.
Buyers considering a short sale will most likely be required to pay for home inspections. In Albuquerque, it is customary for the home owner to pay for the home inspections. In most cases, lenders will not pay for any type of home inspections.
Buyers considering a short sale will purchase the home as is in most cases. Lenders will rarely pay for any repairs needed on a short sale. This means some homes sold short will not meet the requirements of all mortgage programs. Buyers and sellers should make sure the loan package is appropriate for the condition of the home prior to making an offer.
With all these issues why would anyone consider purchasing a short sale? Sometimes short sales can be purchased below market value and provide buyers with instant equity or sweat equity. In a market with limited inventory, a short sale might be a good option for home buyers.
The most important person involved in the short sale process is the listing agent. A good short sale listing agent can get short sales approved in 60 to 90 days. A listing agent that does not understand short sales may never get a short sale done. Make sure you know the reputation of the listing agent if you are considering purchasing a short sale.
I hope this answers your question What is a short sale?