A short sale could seem like a quick, enticing buy. With more and more short sales becoming available, it can be easy to become distracted by the low prices and great deals. It is important to stay focused and avoid common mistakes when buying a short sale. Buying a short sale is slightly different than buying a regularly priced home.
Lora Shinn warns buyers to beware of common mistakes when buying a short sale. Just because there are short sales on the market does not mean you have to buy. One common mistake is ignoring problems with the property. There are usually hostile feelings from the seller when their home is on the market as a short sale. The seller may take the anger out on the home and purposely damage the property. Be sure to investigate the extent of the damage before you consider buying. With the seller in a financial struggle, they most likely have not made adequate repairs to the home.
Shinn also recommends attending the home inspection. Ask as many questions as possible and ask for repair estimates when walking through the inspection. The property needs to be thoroughly inspected in order to get an accurate estimate of repairs and renovation. This will give you a better picture of the money you will need to invest in the property.
According to Elizabeth Weintraub, a common mistake when selling a short sale is poor marketing. Just because a short sale is cheaper than most homes, does not mean it will sell itself. It should be treated the same as any other home. The listing should be marketed on websites, through direct marketing and networking. This will create maximum exposure for the home, which will have a greater benefit than slapping a ridiculously low price on the home with no marketing strategy.
Effective marketing also falls hand in hand with an experienced listing agent. Weintraub emphasizes the importance of selecting an agent who has dealt with short sales in the past. It is a good rule of thumb to go with a realtor who has two or years of experience dealing with lenders in short sales.
From the legal aspect, Richard Easton suggests being in constant communication with the bank. Just because paperwork was submitted to begin the selling process, does not mean the bank is actively working on the negotiation. It is important to be persistent when dealing with the lender. The paperwork from your short sale may be one of thousands the bank is currently dealing with.
Overall, there are several precautions to be aware of when investing in a short sale. Even if you have bought a home before, the process is a little different and slightly more time consuming. The process can take longer due to the amount of short sales on the market. The lender has certain requirements must be met in order for your short sale to be successful.
Please contact Starting Point Home Solutions for any questions!