Thursday, April 29, 2010

How Buying a Short Sale Home Works By John Carlstrom

The state of the real estate industry has affected many people. The housing crisis has resulted to bargains and availability of homes that are offered in the market. The result of the near foreclosure state of some homes has prompted the increase of the number of homes offered for short sale.

Short sale happens when the seller of a house agrees to receive a lower offer compared to the house's market value just to get rid of the mortgage problem. Although it may sound like a desperate move, there are sellers who still exercise proper screening and judgment when they sell the home. Sometimes, the short sale is prompted not because of the mortgage problem but because of the market situation in the area. If the prices of homes in the area have significantly been reduced, the other houses will be affected and a possible short sale can happen. The short sale greatly impacts the price of the other homes in a certain community. If the situation is true for most of the houses, the values of the houses are now worth less than the amount owed.

Although entering into a short sale may sound good because of the low price, you have to consider some risks that you are taking before jumping into the sale.

It is important to know the real scenario before getting excited about getting a very nice home at a very low price. It is good to ask for your real estate lawyer or an agent's assistance to get the public records of the property you are interested in. The records will reflect the person who is holding the title and how much is still owed to the property lender. The records will also show if there have been notices of foreclosure to the property. Pre-foreclosure can happen in a thirty day period or even less. Hence, it is important to know these details to avoid future problems with the property you want to buy. The information that you will gather can affect the amount that you will offer for the short sale. These risks determine the viability of the sale and you can present these to the seller or the lender. You just have to be sure to hire an experienced agent who can expedite the process and get the best favorable results and best protection for your side.

Further, when entering into a short sale it is important to consider the situation of the home and impute the cost that may be incurred for repair and maintenance. You should be careful not to sign any document waiving your right for pest or construction inspection. These are factors that can also affect the value that you will offer.

Going through the specific steps of entering into a short sale is very important to ensure that you will get the best benefits of owning a home in the location that you want at the least possible price possible. The discount that you enjoyed can be used for some other purposes to improve on the home that you bought.

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