Short sales are a different type of purchase than the normal home sale process. Before considering or purchasing a short sale, it is important that you know them and how they work. THE FOLLOWING details some general guidance on purchasing Virginia short sale properties.
How Short Sales Vary from Normal Sales
Short sales describe properties where the amount of funds from the sale will not exceed the balance on the loan, and the home owner has no personal funds to cover the difference. Costs related to the sale can include the mortgages on the property, broker commissions, closing costs, and other applicable charges. The lender on the property will be "short" what is due/owed to them, which is where the phrase short sale comes from. The banks currently holding the mortgages on the home for sale must each be willing to accept the shortage for it to complete. This is how it may get complicated. To receive approval, home owners must provide their financial and personal information, letter of hardship, and a contract from a interested buyer. Properties listed as short sales can only be purchased if this approval is ultimately obtained, and there are no guarantees that it will be.
Short Sale Perks
The number of short sales available has a lot to do with market. At certain times, there might be a large number of inventory. Short sale homes are normally a chance for buyers to get a reduced price on properties. However, they may not accommodate the needs of all buyers.
Short Sale Disadvantages
Short Sale Timelines
Potential buyers must make an offer without knowing that the transaction will actually be approved. It can also take an undetermined amount of time to receive any response on the approval status (normally several months or possibly a year). Therefore, buyers needing to close within a specific period of time should not rely on short sales.
Condition of Short Sales
Short sales typically require more repairs than normal sales. They are traditionally sold in its existing condition since the seller has insufficient funds and the lienholders are already taking a loss. Buyers must be able to address work on their own.
Purchasing Virginia Short Sale Properties
Short sale listings do not fit everyone. Home buyers should understand the possible complications prior to making an offer on a short sale. For prospective buyers with no set time frame and the ability to make renovations, it can be a great opportunity to save money on a property. Speak with your Realtor for more facts on purchasing Virginia short sale properties in your neighborhood.