In a short sale, a buyer pays less than the amount a seller owes the lender. When home values are dropping, homeowners might find they owe more on their mortgage than their home will sell for. In these cases, lenders will sometimes accept less than the amount owed on the home, assuming the homeowners don’t have other assets that can be sold.
The question you have to ask yourself is: Are you really getting a great deal? If the house was purchased at the peak of rising home values, the homeowners might have paid a premium price for the property. If values are dropping, the lender may only be able to discount the property to current market values, so you wouldn’t be getting a bargain at all. Here are some tips:
Know what similar houses on the market are selling for.
- Find out how long the home has been on the market and make sure you get good inspections. A seller in financial trouble often can’t keep up with repairs.
- Remember the lender will be looking for a better deal than a short sale so he or she probably will not instantly agree.
- Make sure you have an attorney experienced in this sort of sale.
If you have questions about short sales, need capable and trustworthy representation or want to receive a FREE list of short sales in your area, just fill out the form below.
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