Dangers Of Short Sales For Home Buyers
This list includes many of the dangers and things that can go wrong for buyers purchasing a short sale.
1. Time: It will take 5 to 6 months or longer to get an answer from the bank.
2. During that time home values may continue to decline.
3. If the bank approves the sale in may no longer appraise at the sales price.
4. It the bank approves the sale you will often have just 30 days to close creating a rush to get all the necessary requirements completed.
5. Interest rates potentially may increase. If rates increase you may no longer be able to afford the home.
6. If the property is vacant the condition will continue to decline while you wait.
7. If the property has a well and septic these systems will deteriorate if they are not used while the house sits.
8. Sales are in as-is condition. The buyer is responsible for all certifications and repairs.
9. Repairs may require buyer to use and FHA 203K rehab loan which could prolong the closing process. This loan also has a higher interest rate and fees.
10. The bank and seller will not fix any home inspection items or items required by the lender. This is the responsibility of the buyer prior to closing.
11. The seller could have second mortgages or additional leans which could hinder the sale.
12. You will go months without communication from your agent without any updates from the seller or bank.
13. You will most likely not get the $8,000 tax credit or $6,500 tax credit.
14. The bank may not approve the sales price and you may have to increase your offer.
15. While you are waiting you will miss out on other potential good buys.
16. More than 70% of short sales do not go through due to various reasons including those listed above.
Please contact me at 609-484-9890 ext. 132 to learn more about the dangers and opportunities involved in buying a short sale home.
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