Short Sales: The Buyer's Perspective
Buyer Short Sales in Overland Park
With foreclosures still in the air, investors and homebuyers are looking for real estate or just looking for a deal on a home still have options. Short sales in Overland Park are still out there and are a choice worth exploring if you have patience & have plenty of time to wait.
A home listed as a short sale means the seller’s lender is allowing for the house to be sold for less than the payoff on the mortgage. A short sale does not always mean the house is in foreclosure if the owner is not making mortgage payments. However, it can mean the owner has fallen on difficult economic times and owes more than the house is worth. Also, in most cases, the current value of the house has dropped. Keep in mind, the seller's lender is not required to negiotate a short sale. There could be an instance that the lender just doesn't reply. They'll let it go to foreclosure. Crazy - yes - but realize we don't know all that is happening on the seller's lender side.
Positive Aspects of Short Sales
In some instances, lenders would rather list a house as a short sale than foreclose on the home. Foreclosures are more expensive for both parties and banks receive a higher profit. Short sales also mean lenders do not have to deal with the upkeep costs of deteriorating property or abandoned homes as they do with foreclosed homes.
What is in it for the Buyer?
A short sale begins when the lender of a home agrees to list it as a short sale. The home is then listed with a real estate agent and buyers are sought. For the buyer, it is recommended he or she hires an agent like Cindy DiCianni who is very familiar with the process.
Before making an offer on a home, the buyer must do some research. Have an agent check the title to find out whether a foreclosure notice was filed and how much is owed. Many homeowners have second or third mortgages so knowing how much is owed against the home is important and will dictate how quickly an offer will be accepted. This important step can help determine the offer made on the home. After the seller accepts the buyer’s offer, the lender must approve the Offer to Purchase before the sale can close. That process can take three to eight months to get a written approval from the bank. Keep in mind - if there is more than one mortgage on the property. You will need to get approvals from all other mortgage companies also. Patience is something you can't be short on when dealing with short sales.
Mistakes to Avoid
While there are many deals to be made on buyer short sales in Overland Park, there are common mistakes buyers make when purchasing a short sale home.
With the purchase of any home, a pre-purchase inspection by a qualified contractor is often skipped to make the deal close faster. Experts agree this is not the step to skip as it will save you time and money in the future. The home’s disclosure should state if there are any structural issues or if the home is in a flood plain. Some short sale homes are fixer-uppers and might need repairs. In many cases the seller has fallen on hard times and has not made repairs. Buyers need to include these items in their budgets if the inspection report shows repairs are needed. Safety issues and termite problems can be negotiated with lenders. But doesn't mean that the lender will negotiated those items.
When a short home sale first goes on the market, can have multiple offers are made by potential buyers. The agent is not typically required to disclose those offers; the buyer’s bid should beat out the other offers while still keeping the price under the market value. Also - the seller's lender will weigh all the offers ie - price, any closing costs paid by seller, amount down payment, type of financing, pre-approval letter on buyer etc - as any seller would. They're looking at "all" terms - price isn't the only factor. Keep that in mind when writing your offer.
It Takes Time
When an offer is made on the house, the lender or bank must first agree to the price and approve the deal. For those looking to close quickly on a short sale, think again: the approval process can take anywhere from three to eight months.
Buyer short sales in Overland Park can be a rewarding experience for everyone involved as long as the buyer goes into the process knowing what to expect. Having an agent like Cindy DiCianna to help the buyer through process can ease the stress of closing the deal and make it a smooth transition. Short sales are normally a lengthy process and a little stressful. So have patience when purchasing a home a short sale.