4 Facts About Real Estate Short Sales

If a short sale sign hanging on a piece of property has you conjuring visions of profits and gains, you’re not alone. Many real estate investors drool at the thought of snapping up properties at below asking price, but the reality is, short sales aren’t always the sweet deals we’d like them to be. If you aren’t careful, you could end up paying way more than you thought, or possibly getting stuck with a home not worth your time or money. To help you make an informed decision the next time you see a ‘Short Sale’ sign on a home, we’ve put together a list of four things you should know. And, if you’re the one hanging the sign, you’ll know how to get a better deal.

What Is A Short Sale?

If you’re hearing the term ‘short sale’ for the first time, rest assured it has nothing to do with any amount of time. It does not mean the home is only for sale for a short time or that it’s only on special for a short period of time.

‘Short sale’ simply means the seller is willing to take a loss and get less than the actual price in order to clear the property’s mortgage.

Short sale transactions usually involve a third party. Before a short sale can go through, the seller’s lender who holds the mortgage on the property must approve the sale, which makes this type of sale different from a normal real estate transaction. Because short sales are a little more complex than regular real estate sales, you’d be best served to employ the services of a real estate agent who is well-versed in conducting short sales. This goes for both buyers and sellers of short sale transactions.

Keep These Things In Mind When Dealing With A Short Sale

1. Know Your Facts

Before you put a house up for short sale or intend to buy a home being short sold, take some time to review the current real estate market and all the financials pertaining to the property. Doing so will help you make an informed decision in terms of how short the sale actually is, where you stand, and how you should proceed.

2. Stage Short Sales

While short sales seem to be acts of desperation sometimes, it doesn’t mean you can sell your property in any old condition. Run-down, dirty, cluttered properties will garner less than those where the seller took the time to clean them up and make minor repairs. If you can afford the expense, it pays to get the property in the best shape possible and stage it to ensure you get the most out of it.

3. Be Prepared for Difficult Negotiations

You might think a seller would take anything for a short sale property, but you’d be wrong. A short sale seller will still try to get as much as possible for his property – not to make a profit so much as to clear his mortgage. Be prepared to haggle back and forth a little before striking a deal on a short sale.

4. Short Sale Doesn’t Mean Poor Quality

Just because someone is selling their property on a short sale doesn’t mean it is of poor quality, has some major defect, or is less than in some way. In fact, many short sale properties are actually in good condition. Short sales don’t always have something to do with poor quality – there could be another reason altogether that the seller needs to get out from under the property.

Short sales can be beneficial for both buyers and sellers. As long as you do your research and make well-thought-out decisions, you could come out on the winning end of a real estate short sale.