In 2011, of all the Chandler AZ home purchase choices out there, one of the most prevalent is the short sale home. I get many clients asking as to whether they should consider buying a short sale home or not. There isn’t a right answer for everyone. For the most part, you can get a good deal if you buy a short sale, but you need to be prepared to go through the process.
Often the question about buying a short sale is coupled with buying a foreclosure and which one is better. In many instances you can get a better deal with a foreclosure from a pricing standpoint, but that is usually where the benefits end. Many foreclosures on the market are vacant which means they haven’t had someone in them to take care of them. Often foreclosed homes are in pretty rough shape – even to the point of being vandalized. Getting a mortgage on a rough home can be difficult if you are trying to take advantage of your VA eligibility and low VA rates and FHA loans because of the extra attention that is paid to the property condition for each of these loan programs.
Short Sale homes, on the other hand, typically have their current owner, or a renter living in them which typically means that they will be in better condition than foreclosed homes.
Next, I typically suggest to my potential short sale buyer clients that they need to be prepared for the long haul. Time is not on your side if you are in the market for a short sale. One reason for this is that the seller and the lender are involved in the transaction negotiation. With the bank needing to approve the short sale request the time to get answer back on a sale contract bid can take months. This is a difficult period of time to wait through if you are in the situation of needing a place to live because of your family or even with a job relocation.
With the process taking so long, it is possible to see the value of the home go down even further which could delay the approval process even longer. This further loss in value is a big cause of potential home buyers getting cold feet and bailing on the contract.
If you have a home that you need to sell in order to qualify for the short sale home, you can pretty much take yourself off the market. The reason for this is that no one wants to go through the short sale approval process only to have it held up by a contingency on your part that you must sell your house to qualify. The whole time during the approval process the seller could have been working with someone with no contingency thus less risk of the deal not going through.