Why Should Buyers Bother To Buy A Short Sale?

By
Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

Should buyers bother to buy a short sale? Yes.

Here’s why;

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.
Posted by

 

 

Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East

Website David.DavidHalpernRealtor.com

(502) 664-7827

 

 

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Rainmaker
287,572
Barb Van Stensel
Chicago, IL

Markets always are changing and a home was never bought for investment early on back in the good old days but for shelter and stability in the family.   I thinking buying a home is a good investment and just like the stock and bond markets, they go up and down.  Look at the 70's, 80's - was the oil crisis, 90's ... One does not buy a home without going in with their eyes open and from what I am seeing today, alot of eyes are open and the comfort zone is much more stable and purchasing is not at the max of affordability.  That's being smart when thinking about short sales or any real estate sale. 

 

Sep 05, 2011 05:26 AM #1
Rainmaker
525,189
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Barb,

Excellent point about not purchasing "at the max of affordability". That in itself is a prudent defense against jolts to the buyer's personal finances.

Sep 05, 2011 06:00 AM #2
Rainmaker
96,693
David Artigliere
Reading, Pottstown, Norristown, Philadelphia - Collegeville, PA
ARTI Home Inspections, ASHI Certified Home Inspect

If buyers purchase a short sale with the intention of staying for a while (several years), they should have a great investment on their hands!

Sep 08, 2011 09:36 AM #3
Rainer
494,722
Lynn911.com ~ Dallas Real Estate Agent Top Team
Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com - Dallas, TX

Dave many buyers don't understand these home can be extremely distressed more money on rehab the house

dallas homes for rent by owner dallas houses for rent by owner lynn911.com

 

Sep 09, 2011 05:57 AM #4
Rainer
478,183
Not a real person
San Diego, CA

If we can get the buying public away from the belief that a house is an investment, the real estate market and the economy will be better off. The only investment a house should be is an investment in one's life, family, and memories. It's not a cash machine!

Oct 04, 2011 06:06 AM #5
Rainmaker
400,198
Michael Collins
*ROCK REALTY|Broker|Realtor|Real Estate|WI Short Sale Agent* - Janesville, WI
CDPE, SFR , Wisconsin Short Sale Specialist Realto

Great blog Dave. I also just wrote a blog today about the advantages of a short sale over a foreclosure. Having someone owner-occupy a home that you are purchasing can offer many benefits!

Oct 11, 2011 08:48 AM #6
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Rainmaker
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Dave Halpern

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