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Real Estate 101: What Is a “Short Sale” And How Does It Work?

Real Estate 101: What Is a “Short Sale” And How Does It Work?

Buying a house is no easy task. There are many things to consider when looking for the right property: location, price, size, and so on. But what if you have a strict budget? What if there’s not enough cash in your bank account for the down payment? Buying a “short sale” home might be an option for you! However, it can also be an extremely risky investment.

In this article we will discuss what a short sale is and how they work, we’ll talk about the benefits of buying one and some mistakes to avoid when doing so, and also cover why you should let professionals help you purchase one. Let’s get started! 

What Is A Real Estate Short Sale?

 A short sale is a type of real estate transaction in which the homeowner sells their home for less than the amount owed on their mortgage. Short sales are generally done when homeowners can no longer afford to pay their mortgages, and they want to avoid foreclosure. This tends to take place in volatile real estate markets where a substantial price increase took place with a rapid price decrease following after.

 Whatever the case, the homeowner is now facing a home with less value than their mortgage. They may approach their lender about a short sale, or the lender may force it on them. The lender agrees that it will forgive part of what’s owed on the mortgage as long as the price is right.

Stick With The Pros When Buying A Short Sale

Without question, if you are considering buying a short sale home you will want to work with an experienced real estate agent. Home purchases are tricky enough on their own, but buying a short sale home is even trickier and will require the right kind of professional assistance.

Short sales take place due to a variety of circumstances, few of which are positive. You will want a real estate professional who knows the ins-and-outs of the short sale process and can guide you through all the steps to make sure nothing’s missed – because there’s no room for mistakes when it comes to your hard earned money.

Mistakes To Avoid When Buying A Short Sale Home

So, you’re pleased with the house you found and want to make an offer. You may be excited about this opportunity but don’t get ahead of yourselves! There are some serious challenges when it comes to buying a short sale home that must not go unmentioned.

First and foremost, there’s no way for buyers (or real estate agents) to know for certain what the home’s condition is. As such, you’ll want to perform an inspection and be sure that your offer includes contingencies should you run into some major issues. 

Also ensure that all of the necessary research is done on the home, its title and any liens against it. There’s nothing worse than finding out that the home you just bought is in some serious debt and will need to be sold again.

Finally, be sure to leave enough time for the closing process as it can take longer than with a traditional home purchase.

In conclusion, it may seem like short sales are an attractive option for people who are tight on cash and looking for a home. However, the risks involved with buying a short sale property can’t be overlooked.

If your financial circumstances have forced you to sell your home, you should consider a short sale with the help of professionals. If you are the one buying the home, you may be able to swing a great deal on it. Again, due to the circumstances.

Regardless, going through the short sale process with a real estate professional like those on the AQRE Home team is crucial to reducing the risks and making sure you keep your hard-earned money.

To learn more about local real estate short sales, get in touch with the AQRE Home team at info@aqrehome.com, or give us a call today at 1 (844) 424-AQRE (2773) and we’ll be happy to help!

 

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