Although the Atlanta economy is recovering, short sale houses are still available. Buying a short sale house is a strategic option that can land you in the ranks of homeowners at a good price. The number of short sales is declining, but there are still plenty out there.
A short sale happens when a house is sold for less than what the seller still owes on the house. The lender must agree to the deal and typically needs verification that the seller cannot make the monthly payments. For sellers, a short sale is better than a foreclosure; their credit usually won’t be as tarnished as it would be if they had walked away from the house let it slip into foreclosure.
About 5 percent of total national existing-home sales in April 2014 were short sales, according to the National Association of Realtors. While foreclosures sold for an average of 16 percent less than market value, short sales were still a good bargain, coming in at an average of 10 percent below market value.
If you’re thinking about buying a short sale house, keep the following advice in mind:
- Understand the benefits. If you opt for a short sale, you’ll likely pay a favorable price. Plus, you don’t have the worries associated with a foreclosure sale.
- Be patient. The short sale process usually takes longer than the standard home sale procedure because the lender approval process takes longer. A hardship request for a short sale can sit on a bank asset manager’s desk for two to three months before a decision is reached.
- Understand the risks. In most cases, you’re buying the property “as is.” You can get a home inspection so you know the health of the house, but you can’t ask the seller or lender to make any repairs or concessions to the price.
- Make your offer competitive. Just because the home in question is a short sale, that doesn’t mean you can lowball. Short sales often invite multiple bids, so you need to make your offer stand out. Banks don’t have time to consider offers that aren’t serious.
- Have your loan in place. If you want to make the strongest offer possible, get preapproved for a loan. This way, the bank knows there’s a secure source of funding. There will also be an amount attached to the preapproval, so there’s no guessing as to how much you’ll be approved for.
- Offer a reasonable amount. Make an offer consistent to comparable sales in the neighborhood. Your real estate agent can help you with this by looking up recent sales of similar homes in the area. The bank just won’t give it away.
Perhaps the best piece of advice is to work with a real estate agent who is well-versed in short sales. A real estate agent also knows how to find short-sale listings. These transactions are more complicated than standard home sales, and Duffy Realty can protect your interests and help you navigate the thorny process.
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