5 Smart and effective tips to purchase a short sale home
A short sale is primarily a process through which homeowners can sell the houses for less than the total mortgage amount. This lets the seller to avoid foreclosure. Both foreclosures and short sale hit the credit score negatively. However, it is said that it is better to go for short sale than foreclosure. This is because a foreclosure remains on the credit report for around 10 years where as a short sale is shown for about 3-5 years.
Tips to buy short sale home
Purchasing a house in a short sale can be problematic. Still thousands of homeowners are eager to buy short sale home. The reason is one can obtain the house at a great discount. Here are some tips that can help you in purchasing a short sale home:
1. Appoint a real estate agent: The first tip will be to appoint an experienced real estate agent. An experienced realtor knows the various aspects of short sale process. He can help you in finding a good short sale home. However, make sure to appoint a licensed real estate agent who has dealt with short sale homes earlier.
2. Identify short sale homes: Identify the homes that are under pre-foreclosure process. You can get information from legal advertisements, courthouse listings and realtor. Keep a close watch on those houses whose equity is less than the mortgage amount. This is because those houses are likely to go for short sale.
3. Inspect the house: Never purchase a home without inspecting it. Check the condition of the house. Does it need repair? Can you afford to renovate the house? If the home needs lots of repair work, then most people won’t purchase it, which may be good news for you.
4. Do home work: Before purchasing a foreclosed home, find out the value of the property. If you’re an investor or thinking to reside in the house even for a short period of time, find out the profit potentiality of the home. You must also gather information on the liens attached to the short sale home.
5. Check your funds: It is essential to check whether you can afford to purchase the short sale home in reality. If you’ve a decent credit score, then lender might offer a mortgage loan. However, it is imperative to keep in mind that you have move in to the house quickly. So, gather funds as soon as possible.
Finally, once you’ve made an agreement with the lender and seller, go through the terms and conditions of the contract in detail. You should ensure the seller understands the written agreement completely.