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List: Posted: 09/30/11
A short sale is a type of sale of a home or other piece of real estate that may be in line for foreclosure. In a situation in which a property owner cannot pay his or her mortgage, he may request that the lender accept an offer on a home that is less than what is owed, if he can find a buyer that will make such an offer.
When this is the case, the homeowner is able to avoid a foreclosure, get out of the loan and the property buyer may be able to save a significant amount of money by purchasing the home.
If you plan to benefit from buying a short sale, you will need to know a few important things about the process before you move forward. Realize this can be a long process and you may not end up getting the home. It is up to the lender to determine if it will accept your offer and some just do not do so. Here are a few more things to take into consideration.
Why Buying a Foreclosure Home Takes Times
* Most of the time, to buy a property like this, you will need time. The lender can take 30 to 60 days to accept an offer and during that time, they may continue with foreclosure proceedings.
* To find a property that may be possible to buy through a short sale, contact your real estate agent or turn to homeowners who may be advertising this need. In some cases, a home will be on the MLS being sold as is and may be a potential sale.
* If you plan to make money from this transaction, you will need to ensure that you purchase the property for less than what the property is worth, but lenders will not take just anything. They expect to get back as much as possible from the sale, at least to cover the initial investment. Therefore, make a fair offer with a competitive price point based on the home's actual worth.
* Realize that a short sale is still a legal process. It is best to work with a real estate agent or a sales attorney during the process. This will help ensure that you get the property for the best price possible and that all of your rights are met during the process. Most of these homes are sold 'as is,' meaning the lender is unwilling or unable to make repairs.
Do it the Right Way
Buying a short sale can prove profitable, but only if you buy a property that is in good condition and you get a good price for it. Buy a property that you plan to live in long-term, to ensure that you can get your full return on your investment. Be ready to buy, too, since the lender may require the sale to process as quickly as possible to avoid the foreclosure process.
A short sale may be your way of saving money on your next home purchase, but if you are not careful, it could cost you more than you expected in the long run.
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The material in this article is for informational purposes only. The views expressed in this article are those of the author and do not necessarily reflect the views or opinions of Local.com. See Additional Information