Short sales are not the same as regular home sales. Before considering or purchasing a short sale, it is important that you know what they are and how they work. The following is some general facts on purchasing Florida short sale properties.
Short Sale Introduction
Short sales describe properties where the amount of funds from the sale will not cover the balance on the loan, and the property owner has no personal funds to cover the difference. Expenses involved in the transaction can include the home loans on the property, broker commissions, closing costs, and other applicable costs. The lender on the home would be "short" what is due/owed to them, which is where the phrase short sale originates. The lenders maintaining the mortgages on the home must each authorize the sale in order for it to complete. This is how it may get difficult. In order to receive approval, property owners must provide their financial and personal information, hardship letter, and a contract from a home buyer. Properties listed as short sales can only be purchased if this approval is actually granted, and there are no guarantees that it will be.
Pros of Short Sales
The number of short sales on the market reflects the condition of the real estate market. At certain times, there might be a large number of listings. Short sale homes are frequently a chance for potential buyers to get a great deal on properties. However, they may not work for all prospective buyers.
Downside of Short Sales
Short Sale Timing
Prospective buyers must move forward with an offer without any promise that the sale will be approved. It can also take an unknown amount of time to receive any response on the approval status (typically many months or even a year). Thus, home buyers requiring to close on specific dates should not consider short sales.
Short sales commonly require significant repair. They are typically sold without any concessions for issues since the seller can not afford to complete any work and the banks are already receiving less than the balance owed. Home buyers must anticipate having to handle repairs on their own.
Purchasing Florida Short Sale Properties
Short sales do not work for all buyers. Prospective buyers must be aware of the benefits and risks before considering or making an offer on them. For potential buyers with no set time frame and the capability to complete repairs, it may be a great opportunity to save on a purchase. Speak with your real estate agent for additional facts on purchasing Florida short sale properties in your area.