Warning... Your browser is currently not setup to allow scripting. This website requires the use of scripting to deliver its dynamic content. Please click here for instructions on how to do this.
Short Sales Are No Bargain for Buyers

11 Reasons for Not Buying a Short Sale

Short sales  happen when home values fall and sellers can’t receive enough cash from a buyer to pay off their existing mortgages. The lenders agree to take less than the amount owed to them. Therefore, short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed.  Remember: A short sale does not extinguish all remaining balances unless settlement is clearly indicated on the acceptance of offer.
On the surface, it may appear that a short-sale buyer is getting a good deal. Although a slim margin of short sales may be profitable for a buyer -- because there are always exceptions -- much of the time, a buyer would be better off buying real estate that is not in default.
You are unlikely to hear real estate professionals tell you that it's not a good idea to buy a short sale. In part, that's because real estate professionals profit on a short sale. Everybody makes money except the sellers and buyers. Realize, too, that listing agents might push sellers to list as a short sale, because if the sellers went through foreclosure, the listing agents will not get the listing. 

Here are 11 Reasons Why Buyers Might Not Want to Buy a Short Sale:

1) Sellers Paid Too Much.
If a home sold for $500,000 a few years ago and is now for sale at $400,000, that doesn't mean the buyer is picking up $100,000 of equity for free. It means the seller paid too much in a rising market and now the market has fallen. It means the seller has no equity.
2) Sellers Borrowed Too Much.
Banks that were eager to lend money in appreciating markets sometimes allowed borrowers to over-mortgage the home, meaning the borrower's loan balance exceeded the value of the property. Appraisals are subjective, and not all appraisers will place the same value on a home. Although against the law, some appraisers are pressured by banks to appraise at the amount the home owner wants to borrow.
3) Stringent Qualifications.
Inexperienced or unethical real estate agents might push a seller into considering a short sale when the seller does not qualify for a short sale. Sellers must prove a hardship and submit evidence of the hardship to the lender for approval. Some agents list homes as short sales without ever talking to the lenders or pre-qualifying the sellers.
4) Homes Sell at Market Value.
Lenders aren't naive or unaware of the value of a home. Lenders will insist on a comparative market analysis, known as a CMA, or broker price opinion, known as a BPO. If a lender believes a better price can be obtained by taking the property back in foreclosure over a short-sale offer, the lender may hold out for a higher price. That price will be closer to market

5) Homes Sell "As Is", even if the roof is leaking, or if there are faulty electrical, plumbing or structural defects.
If a mortgage company agrees to a short sale, it is most likely also paying the closing costs in the transaction. Lenders ask buyers to purchase the home in its present condition. Lenders typically will refuse to pay for:
• Suggested repairs disclosed on a home inspection or  Home protection plans for the buyer.
• Pest inspections or work necessary to issue a clear pest report.
• Roof certifications or roof repairs.
• Unpaid taxes or delinquent homeowner association fees and assessments.
• Deferred maintenance.
6) Length of Time to Close.
Depending on when the Notice of Default was filed, the lender's back-log of foreclosures and how much paperwork the seller has already submitted, it could take anywhere from two weeks to two months to get a response on a purchase offer from a lender. In addition, if two lenders are involved because there are two loans secured to the property, it could take longer to satisfy the demands of the second lender.
7) Lenders Can Change Conditions.
Some lenders reserve the right to renegotiate the terms of the short sale at the last minute. If the market changes, new laws pass or new information crosses the lender's desk, the lender can attempt to change the terms of the contract. Lenders generally have lawyers at their disposal, and ordinary buyers do not.
Send me email for  the next  4------> jaimezuluaga@live.com