Should buyers bother to buy a short sale? Yes.
House values are not going up with consistency, yet.
It Costs Money To Resell a House.
If You Buy Today, How Will You Pay Resale Closing Costs Later?
Buyers know that buying a house is not automatically a successful investment anymore. If the market stays level for years, buyers need to buy now at a discount just be safe later, so they won’t have to bring money out of pocket when they sell.
Short sales in general sell for a somewhat of a discount off market value. However, no one knows what market value is today and they definitely don’t know what it will be in 2 to 3 years.
What if the housing market plummets again? It happened once, it can happen again. The market in 2011 is still trying to stabilize after five years of general downward trend volatility. "Stabilize" means not losing value. Reliable appreciation is still wishful thinking.
Are Benefits of Homeownership Worth Losing Money?
Usually Not. That's Why a Discount is Needed.
Most people want to buy a home so they can feather their own nest without asking the landlord permission to drive a picture hook in the wall or plant a garden. Buyers want to reward themselves for their hard work by buying a dream house. But they don’t want to lose tens or hundreds of thousands of dollars for the privilege, especially in a declining market.
The downside of buying a short sale is the uncertainty of how long it will take the seller’s lender to approve the sale. The seller’s lender may not even approve the sale, which puts the buyer back to square one of house hunting.
The upsides of buying a short sale are;
- The discount
- A short sale house is generally in better shape than a bank owned foreclosure property that was neglected for a year a two.