What First Time Buyers Need To Know About Short Sales

Short SalesIf you are looking to make money on real estate, now is the time to consider short sales. It’s a buyers’ market so even if you don’t have experience in buying or investing in real estate, you can profit from the market by renting houses, real estate flipping, or by buying short sales.

The best route to take if you are a first time home buyer is through short sales. Properties offered at short sales are usually those properties that are at risk of being foreclosed. Instead of letting the house enter into foreclosure the mortgage lender will open it for short sale offers.

Here are some important points you need to learn about short sales to help you better understand this route.

  1. Buying short sales will give you a good value for your money

Short sale properties are usually sold at less than the outstanding value of their mortgage. Mortgage lenders will opt to sell the properties at a value lower than the debt owed rather than let them get into foreclosure, loosing even more money.

  1. Short sale properties may involve running around mortgage lenders

Unfortunately, mortgage lenders avoid short sales as much as they avoid foreclosures since these would cause them to lose money. This is why they would delay short sales as long as they could. If possible, they will go into an agreement with the borrower to allow him to pay for the difference through a standalone unsecured loan.

Short sale basically means losing money for mortgage lenders so they will try to exhaust all possible options before considering a short sale. They would even accept other short sale offers to see where they would benefit the most.

  1. When pursuing a short sale, you’ll have to be stern with mortgage lenders

Because some mortgage lenders will be delaying a short sale as long as they could until they’ve exhausted all other possible options, you’ll need to be in constant communication with them so you’ll know what to expect. If it takes them more than two months to make a decision, call them and tell them you can’t wait any longer and that you’ll be expecting an answer in two or three weeks. If not, then you’ll take your offer somewhere else.

  1. Short sale properties usually experience difficulties in getting proper inspection

Inspections are necessary and highly important in every home purchase. Usually, mortgage lenders allow for the inspection to happen before the final signing. This may work well if there are still occupants at the house. Most often, however, there are no longer occupants in the property at this point. This would mean inability to test electricity and other utilities. To prevent this from happening, schedule an inspection ahead of time. Arrange the schedule with the mortgage lender, your real estate agent, and the current occupants in the property.

  1. Shore sale properties usually require repairs

Since the previous homeowners could no longer continue paying for their mortgage, they would most likely have little money left to fix some parts of the house. This is why you’ll need to be prepared for potential repairs and maintenance including changing leaking faucet and replacing tiled bathroom floors.

Learn more about short sales by contacting Jerry Pinkas Real Estate Experts!

Jerry Pinkas Real Estate Experts
604 N. 27th Ave
Myrtle Beach, SC

Your short sales professionals!

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