In Metro Detroit for the most part, short sales are a very good purchase. They are very close to foreclosure prices and in much better condition. The seller is still living in the home and maintaining it unlike foreclosures, which are often in disrepair to say the least and some are totally trashed. In a short sale, the seller is trying to do the right thing to lessen the impact on their credit. They are taking a very proactive and responsible approach to selling their home and can definitely be worth the wait.
Now you want to know, what are the advantages of a short sale? The advantage is that you are probably going to pay less for the house than it is valued at. This means that you are moving into a home with instant equity. Often homeowners who find themselves in a short sale situation don’t have the time to wait 85 days because they are unable to make the payment on their home, this means that they are selling the house below market value in order for it to sell quicker.
A big question at the present time is “Are you a first time home-buyer?” If so, the federal government is offering an $8000 tax credit to all first time home-buyers or anyone who has not owned a house in the last three years. In order to receive the tax credit you must close on your home before December 01, 2009. With a short sale the process can take anywhere from 30 days to 180 days with most taking 60 days. This is because although the current owners are the sellers they are not going to be paying back their loan to the bank so the bank must approve the offer that you make. This means that if you are considering a short sale and are a first time home buyer you need to be looking for a home immediately or you are going to risk losing the $8000 the government is offering you.
So what is the down side to a short sale? I have already mentioned that it takes a lot longer to close but it also gets more complicated than that. Often the bank takes a while to respond to the offer, this means that you (as the buyer) are waiting for an answer. Buying a home can be a stressful process so just proceed with caution when purchasing a short sale as a home-buyer. They are a wonderful investment opportunity for a buyer, you will need to make sure that your Realtor is fully versed in negotiating a short sale. Not all turn out bad but just be aware that you may be waiting a lot longer than usual before knowing if this house is going to be your future home.
