On the surface, a short sale may seem like a great idea because you could end up getting a very affordable home for sale in Irvine while satisfying lien holders. However, the added bureaucracy of a short sale can result in a few issues. Be cautious when agreeing to a short sale because these 6 things could go wrong at any stage.
Throughout the negotiation process, the holder of the property’s debts may decide to foreclose on the property instead. Though most lenders are reluctant to begin the difficult foreclosure process, they may decide to take this route if they think it can help them recover more money. Try to avoid being rushed into a sale by the threat of foreclosure.
2. Sabotage from Grumpy Homeowners
Since short sales only occur when previous owners are unable to pay their debts, you may end up in a situation where the homeowner does not want to cooperate in selling the property. Viewing and inspecting the property prior to the sale may be difficult, and the property may even be damaged. It is best to focus on pursuing short sales with sellers who seem accommodating and eager to sell the home.
3. A Lack of Repairs
Keep in mind the seller may not be required to make lender-mandated repairs if the buyer is purchasing the property with a VA or FHA loan. The responsibility for these repairs will then be on the buyer, which can add many unexpected costs to the purchase. Set aside some money for repairs and get a thorough inspection to avoid unpleasant surprises.
4. Liens Filed Against the Home
One of the biggest obstacles to a short sale occurs when there is already a property tax or UCC lien filed against the home. When this occurs, the seller may not actually have the right to be selling the property. Instead of waiting for sale approval before doing a title check, do a quick check of the property’s public records before you begin the negotiations.
5. Lengthy Negotiations
Many people who are participating in a short sale for the first time are surprised to find out how long it takes. A short sale requires approval from the lenders, so you may end up needing to go back and forth between lending offices talking to many people. Working with an Irvine real estate agent who is experienced in short sales is a good idea because the expertise and connections may be able to smooth out any issues and speed up the sale.
6. Unexpected Loan Modifications
A short sale alternative is seeking a loan modification, but loan modifications cannot be pursued alongside a short sale. If the homeowner starts a loan modification, the short sale will be automatically halted. Strong communication is key to prevent this from happening. Make sure you are buying from sellers who have no plans to pursue a loan modification.
Only some houses for sale in Irvine, CA, will be short sales. It’s far more likely you’ll be seeing more traditional sales during your search. Get in touch with a trusted local real estate agent at 714-454-6304 to see what your options are.