What to Expect When Purchasing a Short Sale

Short sales have a bad reputation among home buyers. They take forever! There’s no room for negotiation! You’ll never buy a house if you look at short sales! Now,
while purchasing a short sale does require some patience, it’s not as bad as
many people make it out to be.

A short sale is the sale of a property that is often listed for less than is owed to the bank. The seller gets agreement from the bank to sell the home at a lower price to avoid foreclosure. This agreement is good for banks and sellers. The bank saves money avoiding foreclosure, because it doesn’t have to pay insurance on the property or any of the upkeep, or realtor fees to get the property re-sold to new owners. Sellers benefit by not having a
foreclosure on their credit report. Buyers may get the biggest benefit of all by getting a home for a deal.

If you choose to go the short sale route, there are a few things to keep in mind.

1. Patience is a virtue.

Short sales are known for being a slower purchasing process, but the wait is usually worth it.

2. The more liens against the home, the harder it is to reach approval.

You already have the task of getting the seller and their bank to agree to your offer. Now, just imagine trying to get a room full of people to agree to your ideas (or deal in this case) as opposed to trying to convince just one or two people.

3. Pick a knowledgeable realtor.

You’re home buying process will be much smoother if you work with a realtor who is very familiar with the ins and outs of short sales.

Buying a short sale isn’t much different than buying a regular home. Once you have bank approval on your offer, the inspection, appraisal, and closing process moves forward just like normal. If you think a short sale might be for you, or you would like some more information call us today. We are experienced with the short sale process and would be happy to answer any questions you may have.

What is a HUD Home?

HUD homes can be a budget friendly housing choice. Many people already know these homes are usually listed below the market, but there can be some confusion understanding what exactly a HUD home is, or how the purchase process works.

Let’s start with the definition of a HUD home. It is a home offered for sale by the U.S. Department of Housing and Urban Development. They are single family homes that can be up to four units. The homes are usually priced below comparable homes in the neighborhood, so you can often get more bang for your buck by way of more popular neighborhoods, or preferred school districts.

Purchasing a HUD home is a different process than buying a house through other programs. HUD uses a bidding process, and bidding is only open to owner-occupants (people who are going to live in the home) at first. Bids are placed with the help of a registered agent. If the home doesn’t sell, then bidding is opened up to investors. This is great news if you are shopping for a home and don’t want to compete with investors. Some of the available homes also qualify for the “hundred dollar down program,” so you may find a home to buy with fairly small out of pocket expenses. 

If you are interested in a HUD home, be forewarned, many of these houses are not the perfect house, and all properties are sold in as-is condition. You have to keep an open mind when looking at them. A lot of the available homes are going to need some work. Look for a house with good structural “bones.” This can be a great opportunity if you are looking for a property to roll up your sleeves, invest some sweat equity, and make it reflect your personality and personal taste. Most HUD homes are eligible for the 203k program, so you’ll have the funds to make any repairs that may be needed.

If you have questions regarding HUD homes, want more information, or want someone to walk you through the bidding process, give us a call today. We would love to help you achieve your home ownership goals!