Home buyers are seeing a lot more short sales when they do their searches on the Internet. The reason is that short sale listings are on the rise,
Many homeowners owe more than there home is worth and offering their home by short sale is the best option for selling.
As a home buyer you may or may not want to look at short sales. The news has been full of reports as to how difficult they are to buy and some of the problems. Some of this news is true and some is outdated.
In 2007, 2008 and the first half of 2009, buying a short sale was a long, arduous journey and much of the time the deal fell apart at the end. However, we are starting to see the tide turn on this problem. Whereas only 8% of short sales actually sold in the past, we are seeing figures in the 40% range now and believe this will rise.
Why would you consider buying a short sale property?
- As of this writing, November 2009, nearly 40% of the properties for sale in the Greater Phoenix market are short sales. If you avoid short sales you are missing 4 out of ten homes.
- Short sales are generally less expensive than homes sold by home owners in the traditional manner.
- We find that many short sales are in better condition than bank-owned homes.
- Most people selling a short sale have lived in the home and can provide property disclosures to the buyer. this is not the case with bank-owned homes.
- Many of the short sales we're seeing are owner occupied and have not been seriously damaged by angry homeowners facing foreclosure.
- The process is getting more streamlined and the potential to close escrow is rising. New policy due to take effect in January 2010 should help tremendously.
What wouldn't you want to buy a short sale?
- They still take a long time to close escrow. Most of the experts we talk to say it still takes 2-3 months to close escrow once you have a accepted offer from the home seller.
- There are no guaranties the bank will accept your offer. You won't know this for a few months and this can be frustrating.
- If you have a pretty tight time table for moving into a new home, short sales are probably a poor options.
- Homes are sold "AS IS" so it is doubtful the home owners will be fixing anything that comes up in the inspection. In a traditional purchase, the seller often repairs items of concern to the buyer.
If you would like to know more about buying short sale properties, we'd be happy to sit down with you and go over the process, pitfalls and opportunities. Just toss us an email or give a call.
