Buying a short sale isn’t right for everyone, but it can offer many advantages if you have the patience and understand the sale may be denied by the lender. Short sales can be an opportunity to get a bargain on homes for sale in Irvine, and the process isn’t as complicated as you might think. Here’s some of the best reasons to consider buying a short sale.
1. The Seller Probably Doesn’t Care What You Pay
With a regular real estate transaction, you are likely dealing with a seller who either has equity in the home or needs to get a certain amount from the sale to pay off the mortgage and closing costs. A short sale is different because the seller isn’t going to receive any proceeds regardless of the sales price.
2. Many Banks Don’t Pay for Appraisals
Banks don’t want to pay unnecessary fees to unload homes. Because every short sale is ultimately based on approval from the bank, keep in mind the bank may not want to pay for an appraisal. Many banks will simply pay an agent to create a Broker Price Opinion (BPO), which may be higher or lower than the market value of the home. You can have your own BPO prepared to increase the chances that the bank will accept your offer.
3. The Lender May Lower the Price If Repairs Are Necessary
Many short sales are fixer-uppers. If the home goes into foreclosure, the bank will be responsible for paying the costs associated with repairs and maintenance while the home is listed. Many lenders are willing to reduce the price in exchange for selling the home as-is with no repairs.
4. There Are Fewer Risks Than with a Foreclosure
When you buy a foreclosure, the home is more likely to need serious repairs. It’s not uncommon for homeowners losing their homes to cause damage before they move. They may have also been in a difficult financial position for a long time without the funds for home repairs and maintenance. Short sales are a bit different because they allow sellers to avoid foreclosure. The credit damage from a short sale is also less than with a foreclosure so sellers can often move on to more affordable housing. This creates a greater sense of cooperation between the seller and buyer so the home is less likely to need serious work.
5. The Property Probably Hasn’t Been Vacant
Unlike a foreclosure, a short sale is probably occupied while it is listed for sale. This means you can likely avoid the problems associated with empty foreclosures like leaks, stolen fixtures, mold, and trash.
6. You May Have Instant Equity
If you get a good deal on a short sale and buy it for less than market value, you may close the transaction with automatic equity. The amount of equity you can enjoy right away with a short sale can vary, but it may offer a sizable cushion in the future.
From Orangetree to Shady Canyon, Irvine real estate is available to purchase. Whether you’re looking for a short sale or regular sale, it’s vital to enlist the help of a trusted local real estate agent who knows the market. Get in touch with OC Residential today at 714-454-6304 to begin your search.