When people begin researching real estate investing, they’re almost always drawn to short sale properties. These properties seem to offer the best deals and they can often seem to hard to pass up. However, before you invest capital in this type of investment, it’s important to learn more about what’s involved in a short sale transaction.
It’s a Long Process
When you make an offer on a home under normal circumstances, you can usually expect to hear back rather quickly. That’s not the case with a short sale. The offer must be approved by lenders with claims to the property and lenders often have more than a few offers to consider. Just getting your offer approved can take a few months or more.
You Are Getting a Good Deal
There’s no denying that you are getting a good deal. The lender just wants to recover what’s owed, which means they’re likely not asking full market value. Additionally, regular homebuyers are less willing to consider this option, due to the drawn-out process. This means less competition, so you’ll have a better chance of your bid getting accepted.
Short Sales Are Harder to Find in Good Markets
In better markets, you’re less likely to find a short sale to suit your needs. There are a few reasons for this, but essentially a good market means most properties won’t stay on the market for long. This is especially true in cases of a short sale, where the home may be listed below the actual market value.
You’re Buying the Home As-Is
A short sale is different from a regular home sale in that the lender is trying to get rid of the property as soon as possible. This means they’re not going to foot the bill for a home inspection and they won’t require the previous occupant to make repairs. Whatever problems exist with the home will solely become your burden.
The complex nature of buying property through a short sale requires that you do your due diligence. This means hiring and consulting the right professionals to help you navigate the deal. You should be sure any attorneys or real estate agents you work with have experience in assisting with short sale transactions. It’s also important to keep in mind that, even after you jump through the necessary hoops, you may still lose the deal. However, if you’re patient, there’s every reason to believe that you can find the right short sale property for you.