What is a Short Sale? Pros and Cons of Buying a Short Sale Property

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Real Estate Agent with Real Estate Brokers of Alaska 907-720-4663 17724

What is a Short Sale? Pros and Cons of buying a Short Sale Property

Anchorage, Alaska Real Estate


What is a Short Sale?

A short sale is when the proceeds of a property is less than the lien amount. In other words, the proceeds of the sale fall short of the total amount owed to the bank (lien holder) and the lien holder agrees to release the real estate for the lesser amount because the homeowner cannot afford to pay the mortgage.  A short sale is often a popular alternative to foreclosure. Most short sales are done through a third party, usually a Real Estate Professional. In most short sale cases, homeowners are facing a financial hardship and have to prove their hardship to the lienholder.

 

Pros of a Buying a Short Sale:

-The biggest advantage of buying a short sale is PRICE. Short sale listings are typically listed below market value which provides a buyer great opportunity to purchase a home with intant equity.

-Short Sale Listings tend to be in better condition than Foreclosed Homes.

 

Cons of Buying a Short Sale:

-The biggest disadvantage of buying a short sale is TIME. Short sale buyers must be patient because third party (lienholder) approval is required after the seller has accepted an offer on their home.

-The Home is ususally sold As-Is.

-There are no guarantees that the home buyer will get to close on the home, even with months and months of waiting. 

 

Every short sale situation is unique and every negotiator for each short sale is unique so it's hard to predict the outcome of these sales.

The best way to go into buying a short sale is to NOT get emotionally attached to the home. And although I discourage my buyers from looking at a home purchase purely for financial reasons... it is almost encouraged to think of a short sale in that way.

Consider how much time your family has to wait on a home and how much time you consider reasonable. Never ever put your hopes on a short sale home. Once buyers get emotionally invested in a short sale, it can be hard to make pracitical decisions which can affect your ability to do what is best for your family.

 

Some questions to ask the listing agent:

1. How far along are you in the short sale process?

2. Has the bank approved a certain listing amount?

3. Has any paperwork been submitted to the bank?

4. Is there a foreclosure sale date set?

5. Is the seller willing to do repairs?

 

Good luck to you and your family in this exciting time in your life!!! Happpy Home Hunting!


If you or anyone you know is having trouble making their mortgage payments and would like to learn more about the SHORT SALE PROCESS, contact Vanna 907-720-4663. 

 

 

 

 

 

 

 

 

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Topic:
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Rainmaker
592,851
David Shamansky
Creative, Aggresive & 560 FICO - OK, Colorado Mtgs
US Mortgages - David Shamansky

Got to weigh the good and the bad. A great deal "may" be had but if it takes 9 months and drains all your joy and makes you want to pull your hair out at the end was it really worth it? Especially if you go through all that and then it still doesnt work out?

Beware these are by no means easy

June 12, 2012 08:56 PM
Ambassador
393,293
Virginia Hepp
Mesquite NV MLS - Sun City Mesquite - 55+ Buyer Re
ERA - Mesquite NV Homes For Sale

Good questions to ask the listing agent about their short sale -

I have 3 short sales in escrow, on the buyer side.

One buyer is very emotionally involved, has made some bad decisions, takes everything personally.  I worry about that one, because it matters to my buyer too much - it has been 7 months now, she still is not prepared if it fails.

Another is an investor, looking for a good deal - I think I worry much more than she does.

The 3rd is a single guy, looking for a fixer upper.  It would be a good investment, and he would enjoy fixing it up.

All have different motivations, and different ways of looking at the transaction.

June 12, 2012 09:10 PM
Ambassador
1,196,361
Praful Thakkar
Andover, MA: Andover Luxury Homes For Sale
Keller Williams Realty

Vanna, short sales are good for those who can wait - and that's something I feel buyers are afraid of.

Thanks for sharing your knowledge about the short sales.

June 12, 2012 09:10 PM
Rainmaker
74,145
Vanna Siackhasone
Anchorage Real Estate 907-720-4663
Real Estate Brokers of Alaska 907-720-4663

David, You're right. A lot of times the bad outweighs the good in short sale situations.

 

Virginia, good luck with your short sale transactions!

 

Praful, You are right... short sales are for a select few and definitely not for those in a hurry.

 

 

June 13, 2012 06:02 PM
Rainer
87,627
Phil Hillerman
Crye-Leike Realtors®
Crye-Leike Realtors®

Short sales are a challenge.  It sure feels great each time we close one! Have a great weekend.

June 15, 2012 11:32 AM
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Rainmaker
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Vanna Siackhasone

Anchorage Real Estate 907-720-4663
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Additional Information

Anchorage Real Estate. Anchorage, Alaska is where I live, work and play. Anchorage is a city of approximately 170,000 people. Anchorage is a beautiful place to live. The scenery and wildlife cannot be beat, the people are friendly, and where else can you hunt, mountain bike, hunt, hike, and fish less than thirty minutes away? I help home buyers and sellers navigate the world of Real Estate. From start to finish, I am involved in the Real Estate Transaction. Call 907-720-4663 for all your Anchorage Real Estate needs.