2.8 min read
While we all dream of buying a home we can live in for the rest of our lives, sometimes, life happens, and we can no longer afford the payments required to keep the home. When this occurs, the owner, with permission from the moneylender, will allow them to sell their house as a short sale.
In terms of the seller, this can be better than foreclosure. That means that the bank, or the moneylender, has seized the property from the homeowner. But what about the buyer? What does this mean for them? Let’s first take a look at the possible adverse outcomes.
The Cons of a Short Sale House
A Long Wait
When deciding to accept the buyer’s offer, it is not the seller who gets the say, but rather the bank or the moneylender. Sometimes, the lender can take a long time to approve an offer, possibly months, and there is no guarantee that the offer will be approved.
The Price Could Go Up
While in many situations, the owner is just trying to gain back what they own to the bank. Some are still out to make money and, therefore, will increase the price of their home accordingly. Or, they may list their home with a low price but then with the anticipation of a bidding war to drive the price up.
You may risk buying a house that requires a lot of home repairs. It can be for various reasons, but the main reason is that the owner likely didn’t have the funds to maintain the home. If this is the case, the buyer should expect a few home repairs out of pocket.
The Pros of a Short Sale House
Buying a short-sale house can open up new doors, so to speak, to those looking to get into the housing market. Homes that may not have otherwise been in their price range are now within the potential buyer’s reach. Not only that, but they can save a lot of money if the seller and the moneylender are genuinely motivated.
Buying a short-sale house requires a bit of patience. Time is only sometimes something prospective buyers are willing to give; some want a turnkey house and one they can move into tomorrow. If you are lucky, you may be the only interested buyer and won’t have to face any competition.
Short Sale House Versus Foreclosure
In a case of foreclosure, where the bank has seized the property, thus forcing the owner out of their home, a short sale still lets the home remain occupied. It usually means that the homeowner won’t destroy the property and will still relatively maintain it.
Ultimately, as with any home purchase, you stand to take some risks. That said, a short-sale house is a good idea if you know what you are getting into and have a qualified and experienced realtor.