What Home Buyers Can Expect In Buying Short Sale Home
This BLOG On What Home Buyers Can Expect In Buying Short Sale Home Was UPDATED On July 6, 2017
- There are many short sale homes that can be bought at bargain prices.
- However, that is not always the case.
- A short sale is a form of pre-foreclosure where home buyers can still deal with the seller of the home.
- Buying short sale home is purchasing the home for lower than the amount of the mortgage of home seller so lender approval is required.
- For example, If a home seller has an outstanding balance of $300,000 on mortgage and home buyers is buying the house for $250,000, that is a prime example of buying a home via short sale.
- The seller of the house has been given permission by current mortgage lender and will need the mortgage lender’s approval with purchase offer for the short sale purchase offer to be valid.
Benefits Of Buying Short Sale Home
Millions of home values have plummeted after the 2008 real estate and credit market crash.
- Homes that were once selling like hot cakes for $500,000 can be only worth $250,000.
- If someone purchased a home in 2008 for $500,000 and has taken a $400,000 mortgage loan on it, the seller might be listing the house for $350,000 via short sale.
- A home buyer might think that the $350,000 price tag is a bargain and might be putting an offer for the listing price of $350,000.
- Even though the $350,000 listing price is way below the original purchase price amount of $500,000, the house can still be overvalued and the market value of the house can be worth only $250,000.
Buying Short Sale Home Is Always Not Bargain
Buying short sale home is a good strategy but the home buyer needs to do their own due diligence. However, home buyers buyers buying short sale home needs to realize that short sales are not always deals. Many times there are better deals with non short sale listings.
- Please do not be misled with the term short sale.
- Remember that home prices has tanked drastically since 2008 and many homes values have since increased in value.
- After the 2008 Real Estate meltdown, many homes have dropped by 50% or more.
- Consult with realtor and seek out realtor’s opinions when buying short sale home.
- Do not just limit in just shopping short sale homes.