Should I Buy A Short Sale Home
Before we answer if you should buy a short sale home in Albuquerque we need to explain what a short sale is. 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.
Important Factors To Consider Before Buying A Short Sale
A short sale must be approved by the home owners lender. Each lender has different rules and processes to approve short sales. In most cases, the short sale approval process will take 2 to 4 months. Then the buyer of a short sale will need about 30 to 45 days to close on the transaction if they are borrowing money to purchase the short sale. Home buyers considering a short sale need to have a lot of flexibility in the schedule to buy a short sale home. No short sale can occur without the approvals of the short sale lender(s). If you can’t wait several months, buying a short sale is not a good fit for you.
A very important question to ask the listing agent of a short sale is – has the list price been approved by the short sale lender. In many cases the short sale lender will not provide assistance in pricing a short sale home to the listing real estate agent. Therefore the listing 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.
Another very important question to ask the listing agent is the number of liens that exist on the short sale. More liens may make the short sale more complicated and may take more time.
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, short sale lenders will not pay for any type of home inspections.
Short sale home buyers will purchase the home “as is” in most cases. Lenders will rarely pay for any repairs needed on a short sale. This means some short sale homes 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 home buyers buy short sale home? 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. Have your real estate agent ask the listing agent how many short sales have they completed in the past 2 years
I hope this helps you answer the question should I buy a short sale home?
Check out this article where John Myers of Myers & Myers was interviewed and quoted by UN News.
Myers & Myers Real Estate are experts in listing and helping buyers purchase short sale homes. Please call us at 505 401-7500 if you are considering buying a short sale or is you would like to discuss whether a short sale is for you.
This article is prepared by Myers & Myers Real Estate. Check out homes for sale in Albuquerque NM and homes for sale in Rio Rancho NM. Myers & Myers Real Estate is a full service residential real estate brokerage located in Albuquerque New Mexico. We help home buyers and sellers in the Albuquerque NM metro area.