For potential homeowners looking to get a property at a great price, short sale properties are definitely worth a look. A short sale is when a property is sold for less than what the current owner owes on the mortgage. The advantages of purchasing a short sale property is that homeowners are often able to find great properties in sought after areas. The downsides are that these sales can take a lot of time and the home may not always be in good condition at the time of purchase. Before going through with this type of home purchase, there are a few things that the buyer should do.
Hire A Real Estate Lawyer
Many homeowners purchase a home with just the help of a real estate agent and a mortgage provider. While this works well in a traditional home sell, purchasing a short sale property can be a little trickier. Hiring a real estate lawyer, such as those from Heil & Saylor, is something that should be considered before purchasing this type of property. The main advantages of using a real estate lawyer is that they are able use language that appeals to lenders, they know the local real estate market, and they also know all of the laws pertaining to a short sale.
Be Prepared To Wait
One of the biggest drawbacks to purchasing a short sale is the amount of time it can take. The current homeowner's lender must approve the sale after the buyer has come to an agreement with the seller. Lender approval takes an average of around two months for a property with just one mortgage. However, if there are multiple lenders and mortgages, this process can take four months or more. Potential buyers should be prepared for this and plan accordingly. Often this means making sure that they have a place to live while the short sale is going through.
Get Financing In Order
One of the most important things to do before making an offer on a short sale is to get pre-approved for financing. This is often done by having an approval letter from a lender on hand before making an offer. A real estate lawyer can assist with the paper work that is needed to show that the buyers have their financing in order. Before purchasing a short sale, it is also a good idea to secure financing for any updates or renovations that may need to be done to the home. This is especially important since short sale properties are often in bad condition at the time of purchase.
Purchasing a short sale is often a great way for homeowners to purchase a property that may have been just out of their reach. However, before making an offer, potential home buyers should consider hiring a real estate lawyer, be prepared to wait, and get their financing in order.