Tips to Purchasing Short Sale/Foreclosed Properties

The Tri-Cities area is ripe with excellent Foreclosure and Short Sale deals waiting to be snatched up. Short sales and foreclosures are great ways to get a deal on a house or condo, but you should know what to look for and what to look out for.

Short Sales occur when a lender allows a house to be sold for less than what is owed on the mortgage. In many cases, the bank will lose less money in a short sale transaction than letting the house go into foreclosure. Since the lender is responsible for approving the sale, it is important to make your offer as appealing as possible.

Get pre-approved with a qualified lender. A pre-approval letter is a MUST for short sales to prove you are serious about your purchase.

Don’t try and negotiate for repairs or ask for special reports on the house. It is best to buy the house “as is”.

Offering a deposit of 2 – 3% of the offer price is going to catch the bank’s eye a lot more.

Conventional loans or All Cash are the most appealing.

A large Down Payment makes an attractive offer.

It’s important to remain patient. Short Sales have to go through extra steps than a regular transaction, such as bank approval, so don’t get over anxious if it takes a couple of months before an answer is received. With Short Sales, the deal is never done until the papers are signed, so don’t be afraid to place an offer on several opportunities rather to focus on one specific property.

It is never out of the question to make offers on homes or condos that already have existing or even have already accepted offers. Many times the original offer will back out of the transaction due to several factors that may occur in the length of time from their original offer and the Short Sale approval.

Always remember that the best deals go first and if you see a good property, you should submit an offer ASAP.

Short Sales vs. Foreclosures

The Alternative to Foreclosures - Short Sales

A far as real estate transactions go a short sale is not a very pleasant transaction either but it could be a better option than bankruptcy or foreclosure.

Signing away the rights to your home in a foreclosure proceeding can have lasting effects on a family the home owner loses their credit rating and is unable to restore this for as long as a three year period. A short sale can actually save a home owner from having to undergo the further indignity of losing their credit score.

Because of the economy right now in our country home owners are choosing to sell their Tri-Cities real estate by way of Short Sales. In California agents are reporting that more than half their listings are due to short sales.

But the seller themselves do not have the authority to sell their own property in a short sale. The permission has to come from the lender of the loan. The lender will agree to sell the home in a short sale but it also means that the lender is agreeing to probably take a loss on the property.

Not to say that they excuse the balance outstanding, the home owner is generally still held liable for this unless in case of extremely extenuating circumstances. Many lenders agree to a short sale but not to discounted pay-offs, while many other lenders will not even agree to a short sale, as not all Tri-city real estate or sellers qualify for a short sale.

It is highly recommended that any home owner considering the possibility of a short sale, seek legal advice from a real estate lawyer. This is because the drawbacks can often out weight the benefits. An accountant should also be consulted to look into the tax implications of a short sale as the IRS might consider debt forgiveness as income.

There is also the possiblity that the lender will still hold the balance of the unpaid debt to the sellers responsibility and many US states allow deficiency judgments in matters such as foreclosure and short sales. Only a lawyer will be able to judge if the lender has a deficiency claim against the borrower.

In a short sale the lender is going to require a great amount of detail from the future buyer. Even though each lender is different its best to be prepared if you are going to start the short sale process. It might take you a few calls to determine who is responsible for short sales purchases from your lender, but they will also be able to provide you with details of the information they require.

If you are considering a short sale or foreclosure for your Pasco, Richland or Kennewick real estate, don't hestiate to call me today. We can go over options and dicuss the possiblities you may have.