What You Need To Know If You Plan To Purchase A Short-Sale Home

If you are planning to buy a short-sale home, it is imperative that you understand a few things about the process. Some people know very little about short sales and assume that they are fast and simple. Misunderstanding the process and what you need to do can lead to costly mistakes or other issues. The main thing you need to know prior to buying a short-sale home is that the home you are interested is technically in "pre-foreclosure." This makes the sales process a lot different than the sale of many other homes on the market. 

The lender is in control.

Perhaps you will find a short-sale property that you love. You may even make an offer to the seller. However, the seller cannot make the final decision about your offer. The lender will need to make the final decision about whether or not they will accept your offer. This decision may take longer because many lending institutions have committees that make these decisions rather than a sole individual.

Research public records for pertinent information.

Public records will enable you to know whose name(s) are on the title. You will also be able to determine how much is owed to the lender as well as how close the home might be to foreclosure. You need to know how much is owed on a property to make a reasonable offer. 

Include a real estate agent with short-sale experience in your efforts.

You may think that a short-sale is an easy process, especially if you have heard ads on TV or the radio claiming that it is simple enough for the average person to do alone. Working with an agent is beneficial for several reasons. The lender must be given documentation of your offer, and an agent can help you draft the offer. They can also help with the public records search if you are not savvy enough to do it. If sufficient time has elapsed, an agent will know the correct protocols to use to follow up with the lender on the status of your offer. 

When you want to buy property of any kind it's smart to involve real estate agents. But it's even more important in short sales.

The home will be sold as is.

If the lender accepts the offer that you make, do not assume that repairs will be made to the home. You can protect your interests by getting a home inspection performed. This will ensure that you do not end up with a home that has expensive hidden repairs such as electrical problems or water damage.