While the video above may be entertaining, you’d be surprised how many first-time home buyers have had similar experiences trying to purchase a home at below market value prices.
Since we specialize in finding and negotiating underwater and distressed property for our clients, you won’t have to worry about getting caught up in the typical foreclosure / short sale circus that can be discouraging to many first-time home buyers.
If you’re interested in taking advantage of low interest rates and the abundance of properties that can be purchased below market value… we can help.
Short sales have caveats that need to be considered when pursuing financing.
If the guidelines and potential pitfalls are not properly understood, you could face delays in closing or potentially even a denied loan.
Short Sales & Foreclosures:
Short sales and foreclosures are everywhere, and they often represent great value when looking to buy a new home.
However, they also present a unique set of problems that home buyers need to be aware of and plan for.
- Property Condition
Typically, when homeowners are facing foreclosure or looking to short sell their house, it means they lack the financial means to pay the mortgage or maintain the property.
A property in poor health can cause many financing issues for traditional financing. FHA loans have specific rules requiring that the property is move-in-ready, unless you’re using a 203(k) Rehab Loan.
- Timing Challenges
Short sales typically come with awkward timeframes for purchase contract approval and loan closing.
Each bank is different, but approval can take anywhere between 3 weeks to 12 months, but typically 4-6 months.
The lack of a set time frame for short sale approval makes the timing of loan submission, rate locks and closing very challenging. You have your approval conditions cleared to close on time, just to find out that new appraisals, income, employment and asset verifications need to be updated by an underwriter to cover the most recent 30 days. Worst case, purchase contracts and legal documents may have to be re-submitted to a bank for an updated approval.
Either way, be prepared for a lot of redundant paperwork when purchasing a short sale property unless you are part of the Home Advocates investor / buyer program.