Are you looking to buy a short sale in Long Island? There are some things that should concern you when buying a short sale in Long Island. In this post, we take a look at 3 things that buyers should think about before buying a short sale property.
The Value of Short Sale Opportunities
First, let’s look at the advantage of finding short sale buying opportunities. Short sales are houses that are sold with the net proceeds being less than the balance of the loans. In some cases, they also carry a tax lien on the property because the owner was unable to make their tax payments. In many cases, there may be one or more lien holders, all of whom get a portion of the final sale.
It is important to look into this when considering a short sale. We’ll take a look at some other considerations, as well. However, it can be a good opportunity to get a house fast at the lowest market price. So doing a little homework will pay off.
3 Things That Should Concern You When Buying a Short Sale
1. Lenders may require buyers to do an inspection and appraisal before closing the deal. House inspections are required in most cases before the lender will approve the loan for a short sale. However, they may allow the applicant to wait until they have closed the deal with the seller. If you are buying a short sale house, you will need to make sure you arrange for a property appraisal and inspection either before or after your loan is approved, in order to know what you are getting. Most short sale houses come “as is” and the contract is usually written that way.
Having an understanding of this and the other risks of a short sale is important when dealing with an individual real estate investor or agent who is looking to move a short sale out fast. The advantage is that you may be able to get a good house at the lowest possible price. Remember that short sale sellers need to sell fast. So you may be able to profit from the situation by saving money on the purchase if you like the property.
2. Lenders or other third parties may require utilities turned on ahead of time and repairs completed. Some lenders may require that you have the property repaired and utilities turned on before you close. This can cost you extra money and create a higher degree of investment. Also, since some short sales do not go through, you could lose any money you invested toward inspections, appraisals, and repairs. Fill out this form to learn more.
3. You get what you see. This is just another way of saying, “What you see is what you get.” But you get the point! With short sale houses, sellers are not likely to spend thousands of dollars on repairs like the original owner might have done, since they have likely already invested all that they want to in the property. The seller’s goal is to sell and sell quick, whether they are the original owner or an investor. So it pays to keep this in mind.
Be straightforward with the seller when dealing with a short sale and tell them what you can afford to invest. Tell this to the lender also. Remember that, while they have a process to go through they are still human. A seller and a lender are both likely to deal with you if you know how to approach the situation.