When you are looking to buy a home, there are some ways you can get a better deal on a home than you might otherwise. One way to pay a little bit less for a home is to purchase one that is being offered for a short sale. This can be a complicated process, and one that you can discuss with your real estate attorney before deciding this is the right type of sale will work for you.
Why the Home is Being Offered as a Short Sale
When a home is being offered for a short sale, the homeowners owe more on their home than it is worth. Usually the homeowners are facing foreclosure, and they are eager to sell their home at any price. While the lender is going to want as much money as possible for the home, the lender also understands that they will get far less if the home goes into foreclosure. You can make an offer on a home being offered as a short sale that is lower in the hopes that the eager homeowners will accept your bid.
Short Sales Can Take Longer
Sometimes a short sale will take longer than a traditional sale. This does not mean that you are going to lose out on the house, but negotiations may have to take place between you and the sellers. This is why it is helpful for you to work with a real estate attorney who can help you through this process. Once you make an offer and the homeowners accept it, the amount of your offer must be approved by the lender. If the amount is too low, the lender can say no to the short sale. In general, the homeowners will have a good idea what the lender is willing to take in return for the forgiveness of their upside down mortgage.
The process may take a little longer, but it is often worth it to the home buyer to wait the extra time for a short sale to go through. With some negotiations, the home buyers are able to purchase more home for their money, and the lender is usually eager to sell the home to a qualified buyer.
As part of the purchasing process, it is always beneficial to get pre-qualified for a mortgage ahead of time. This may speed up the process for the short sale, as the lender will know that they can get their money quickly once the sale goes through.