Helpful Home Buyer Information You Should Know about Buying Tampa short sales?
It’s understandable that buyers pursue short sale properties in effort to get a good deal on purchasing real estate. So when you see a price listed for a home that you think is too low for the neighborhood and before you jump on that price like hot fudge on a sundae, the home is likely a short sale property. Be aware that buying a short sale property is not as simple as buying a home from a bank or private owner.
What is a Short Sale?
A short sale means the seller’s lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even it is the full price as advertised and even if the seller has accepted it. Be aware that the seller need not be in default to have stopped making mortgage payments before a lender will consider a short sale. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.
Why Would a Lender Do a Short Sale?
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. They will consider this over the alternative of foreclosing on the property because it is the most financially constructive way to retain the most money for the lender. If the lender is forced to foreclose a property, it results in thousands of dollars spent by the lender to have lawyers, costs associated with the buying and selling processes, and they property is more often vacated along with appliances and fixtures, and the condition of the property is also more likely subject to damage.
What are my odds of getting the lender to approve my offer to purchase?
There are several things that are considered that will determine the lenders acceptance of a short sale and an offer that is presented to them as a purchase of the property. Your chances of getting an approval are weighted on both the true situation of the sellers need to sell along with the lenders willingness to accept short sale based on the sellers circumstances. The other is the terms of the offer presented to them. At this point the lender must analyze the worthiness of the offer both in the total dollars they will net combined with the financial ability the buyer has to make the purchase and determine if this is their best option.
How do I know how much to offer?
You should rely on your Team Barone Realtor to provide you evidence of the value of the home compared to others that had recently sold that would be comparable. Realize that the asking price is usually already discounted below market in effort to entice multiple buyers like yourself to request viewings and submit offers on the home. Because of this, Tampa short sale properties can easily receive multiple offers and even ones that are higher than the asking price.
What could go wrong with my offer?
It could be determined too low for the bank to accept as their best option to sell the property before foreclosure. Most situations result in either acceptance or denial of the offer, rather than a counter offer be submitted by the lender. You can also fear the possibility of being out bid by another willing buyer during the wait process of acceptance from the seller’s lender. What can be most frustrating is that you could be denied of your offer even if you have offered full asking price. Realize that in many cases the bank had nothing to do with the asking price and the seller is desperate to purchase any offer that might result in salvaging their credit rating.
How long does it take to get my offer approved?
A working crystal ball would be necessary in nearly all cases to answer this question regarding a short sale. The number one thing you must understand when deciding to offer to purchase a home in short sale, that is generally takes several months to get a response from the seller’s lender on your offer. There is no regards to giving the lender a timeframe to deny, accept, or even respond to your offer to purchase. Therefore, the wait can possibly get you a good deal, but if your purchase requires a stringent timeframe that you must close the purchase, then you may be not consider a short sale or have an alternate plan of action while waiting for an answer. In few situations, the lender may have already pre-approved the short sale with conditions and in this situation the lender will accept or deny the offer much quicker than a non-approved short sale.
Will they fix problems with the home and can I get a home inspection?
Another understanding is that the purchase terms are often the same as a foreclosure home. That is that your purchase is “AS-IS” with no warranties, guarantees, or repairs that will be attached to the purchase if you offer is accepted. Often, you will maintain the right to have a professional inspection with the right to be satisfied with the results of the property inspection.
The seller has agreed and signed the contract, now what happens?
The process of buying a short sale is less depended on the actual sellers agreeing to it and is really completely dependent on the seller’s lender. Since the seller will not get any monies from the sale of their property, they often willingly sign contractual offers and submit them to their lender as quickly as possible for consideration. If they can get the lender to accept your offer, this will help them avoid foreclosure and negative reporting on their credit. So, just because the seller has signed the contract it is meaningless until the lender as approved it as well.