In past few years, short sales and foreclosures have contributed maximum in the overall real estate business. Despite of the large number of successful short sales in the market, most of the buyers are unaware of the process. Short sale is a complicated process with so many transactions involved in the overall process. There are so many misconception, myths and misunderstandings surrounding short sales. I have been working as short sale agent in Temecula for very long time and I have seen people getting confused during the short sale proceedings. In this article I am going to highlight some of the most common myths and misunderstandings in short sales and how to deal with them.
Short sale industry has been dominating distressed property sector and REOs are considered to be the thing of past. Short sale comprises of the most of the properties throughout California and if you are looking to get a house through short sale, it is best to understand some of the basic concepts in advance.
Short Sales are Potential bargains for Buyers
While helping people in getting through short sales in Temecula, I have come across buyers with extraordinary expectations from short sales. The most common thinking is that short sales are the lowest priced properties in the market and because of the financial issues faced by the sellers; they will simply put their property at the bottom of the list. But the truth is that short sale properties are set to a low price so as to attract tons of buyers. Even after a price has been finalized, bank will have the final say in the process after appraisal. Moreover if the bank is not satisfied with the offer, they are going to refuse it by providing any sort of reasons so as to get the property in open market.
Short Sale Sellers are motivated to sell the property
Well, this is the biggest misconception in short sale process. Give it a though; sellers are going to lose their home, their credit is declining, they have to find accommodation under such difficult circumstances, and they won’t get loan approval for at least two years. No one would be happy to lose their home and it may even stretch the overall process.
Short Sales transactions are short!
This is another common misconception in short sale transactions. The term “Short” in short sales mean that the seller is ready to sell the house for a value less than the mortgage amount that he owes for the same property. They are “short” with funds and on an average, short sales take longer time than regular real estate transactions. As Temecula short sale agent, I have even witnessed short sales that were closed in as long as 18 months.
Buyers have Protection in Short Sale transactions
There are No Guarantees whatsoever in short sale process. It is not guaranteed that they will receive the property in the same condition as they reviewed earlier. Further, there is no guarantee for all the appliances or damage caused in the property. While dealing with short sales in Temecula, I have encountered deals where the buyer has to pay additional fees to close the deal successfully. Keep in mind that short sales are among the riskiest transactions in real estate and you are going to face them during the overall process.
Short Sale House owners will set the price!
In my career as Temecula short sale agent, this is the biggest misunderstanding in short sale process and every buyer is confused regarding the final price of the house. Generally buyers are of the thinking that they can negotiate the price with seller, pay the amount and get the keys of the house. In most of the cases, Buyers are startled by the final offer made by the bank and it is always higher than their previous offer. Actually neither the bank nor the house owner decides the final cost of the house. This call is made by the loan provider and don’t be surprised when some guidelines makes no sense at all.
Some other important myths and misconceptions are:
•Short sales are easily accessible.
•Short sales come in “AS-IS” condition.
•In case the deal collapses, buyer will get the expenses reimbursed.
In short, short sales are really complicated and the buyer should be ready to deal with any situation that may come up during the process.
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