In this blog, we will discuss and cover the negative factors in buying short sale homes for homebuyers. Negative Factors In Buying Short Sale Homes includes constant delays and longer closing times than traditional real estate purchase transactions. Nothing is wrong with buying short-sale homes. However, homebuyers need to realize the Negative Factors In Buying Short Sale Homes. To understand the Negative Factors In Buying Short Sale Homes, one must understand the overall short-sale home buying process. Homebuyers who need to close fast on a home may want to steer away from a short-sale home. In this blog, we will discuss Negative Factors In Buying Short Sale Homes.
Understanding The Short-Sale Process
Short-sales were extremely popular right after the 2008 Real Estate And Banking Collapse. Many homeowners owned homes with values lower than the mortgage loan balance. They were stuck in their homes. In order to sell their homes, they needed to come up with the shortage between the loan balance and market value. Many homeowners did not have the cash to come up with the difference.
The Foreclosure Process
Foreclosing on an owner-occupant home takes time and money for the lien holder. In lieu of foreclosure, many lenders offered homeowners to do a short sale and/or deed in lieu of foreclosure. Many opted for a short sale. A short sale is when a lender offers a borrower to sell their homes for a lower price than what is owed on their mortgage loan balance.
How Does A Short Sale and Short Sale Process Work?
The homeowner can choose a realtor of their choice. Home sellers need the approval of the mortgage lender at every step of the home sales process, especially the final offered price. Short sales are not as common as it used to be but there are still many homes with upside-down mortgages that are listed as short sale homes. There are many Negatives to buying Short Sale Homes. Homebuyers need to become aware of the negative impacts.
Delays Are Biggest Negative Factors In Buying Short Sale Homes
Most home sellers and buyers agree that delays by the mortgage holder are the biggest negatives in buying short sale homes. Most short sale transactions take anywhere between 3 to 6 months to close. Traditional non-short sale transactions normally take 30 to 45 days to close. Homebuyers should take these negative factors in buying short sale homes.
Homeowners Going Through a Short Sale Process
Buyers who need to move in a home purchase right away will not benefit from the short-sale home purchase. Another false conception home buyers have with short sales is they are underpriced below market value. This is often not the case. Most lenders are savvy and will not let a home go for a bargain unless they absolutely have to. Short sale homes being bargains is normally not true.
Mortgage Rate Locks Due To Delays In Closing
Most borrowers who are buying short sale homes need to extend their mortgage rate locks. If mortgage rates keep on increasing, the mortgage rate lock extension costs money. However, if the mortgage rates decrease, Gustan Cho Associates can offer a lower mortgage rate and extend the lock for the next 30 days. For more information on negative factors in buying short sale homes, please contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at email@example.com. We are available 7 days a week, evenings, weekends, and holidays.