Short sales is the situation where the value of a home falls down terribly and the property is sold for an amount less than the total mortgage held against the property. This definition may appear great for all the short sale buyers. Being an experienced short sale agent in Temecula, I would like to inform all the buyers that short sale may appear to be highly profitable but it has some major concerns attached with it.
If you are a buyer looking for short sale home then you may have experienced that there are very few agents offering short sale services without any trouble. Most of the agents do not prefer short sales because of the complicated process and time required to close the overall deal. I would like to highlight some common reasons because of which buyers generally avoid short sale listings.
Time required for closing a short sale: One of the most important problems in short sales is the length of time required to close successfully. Generally it depends on the amount of paperwork done by the seller and previous backlog of foreclosures against the property. In addition, if the property involves second lender then it may take much more time in satisfying the demands of the second lender as well.
Home available in “As in” condition: This is another major setback of short sales that terrifies potential buyers. Most of the houses are offered in the present condition, often termed “As is” situation. The lender or bank will refuse any payment for required repair work, any home protection plan and cost for deferred maintenance. The buyer will be required to pay for all this from his own pocket.
Qualification of Seller: As a Temecula short sale agent, I have witnessed cases where real estate agents pushed the seller for a short sale listing without considering the qualification criteria. It is required on part of the seller to prove financial hardship and provide subsequent proof to the lender. My advice for buyers is to look out for pre-approved short sale listings for avoiding such situations.
High closing costs for Buyer: A short sale deal may close higher than the offer price because the lender will not pay for any extras and the buyer has to pay these costs from his own pocket. While working as a short sale agent in Temecula, I have witnessed cases where the lenders even denied paying transfer taxes for the property. Upon compilation, it may end up selling for a larger sum than expected.
Change in terms of the deal by Lender: In some cases, lenders reserve the right for renegotiation of the terms of the contract. If a new law or information comes under knowledge, there are chances that they may change the terms of the contract. In most of the cases, lenders have professionals to handle these deals unlike buyers handling everything on their own.
In addition to all of these issues, the buyer does not have any control of the transaction. All the shots are called by the lender and the buyer has to agree to these terms. You might be thinking that being a short sale agent in Temecula, why am I highlighting these issues? Well I have witnessed frustrated buyers in similar situations and it is best to inform an individual rather than waiting for him to fall prey to such conditions. If you are planning to purchase a short sale house then it is advised to hire an experienced short sale agent that can help you throughout the process.
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