If a seller owns a home that has significantly decreased in value, it may be put on the market as a short sale. A short sale is when a home sells for less than its original assessed value, and can only be done with permission from the lender. For buyers, this is an excellent opportunity to purchase a home for a great price, but there are also some risks involved. Before you shop for a short sale home, follow these tips to ensure you get the best house for your money.
Be Aware Of Hidden Problems
Most homeowners who are selling under a short sale are forced to do so for various reasons, whether it's lack of ability to pay the mortgage or a downturn in their local market and they need to move right away. When considering a short sale home, be aware that there could be some serious underlying maintenance issues. Many times, homeowners will walk away from the house, leaving it in a state of disrepair. Always have a professional home inspector look carefully at the home including important areas like the windows and roof, heating and cooling system, and foundation. You don't want to end up with a "lemon" that will cost you more to repair than it did to purchase.
Get All Legal Information
When a home is sold under a short sale, the buyer does not receive any legal disclosures about the home regarding issues like its flood plain location, or renovations that were done without a permit. You may need to do some extra research to ensure that the home has a free and clear legal background. Determine if the house needs flood insurance, find out if there were any additions done without the correct permits, and make sure there are no current plans for development nearby that could affect the home's value in the future. All of this information can be discovered with the help of a real estate attorney, who can reach out to localities and get the information you need to make a sound decision.
Consider The Timeline
If you're in a hurry to buy a home, a short sale may not be your best option. Since banks are losing money on short sales, they're in no rush to close the deal. In addition, the lender could hold up the closing process due to other liens that are on the home that are waiting to be resolved. If you are prepared to wait, a short sale can be an excellent way to find a home for a terrific price, but you must consider that it might not be available to move into right away. Consider your personal costs like rent on another place, paying for a storage unit, and other costs that you will have to keep paying until you can close on your new home.
For more assistance or information, talk to a lawyer like Iannello Anderson.