Is a Short Sale Right for Your Buyer?
Determine if a Short Sale is Right for Your Buyer
There are many advantages to purchasing a home through a short sale. One of the well-known advantages is the possibility of your buyer getting a discount on the value of the property. Most short sale listings can be successfully purchased at an 8-10 percent discount in most markets often a better discount than buying bank-owned/REO—listings. When compared to bank-owned listings, the majority of homes being sold as a short sale are owner-occupied. This means there is a greater probability the home will be in better condition for the new buyer move-in.
Understanding Short Sale Timelines
Another factor in deciding whether or not purchasing a short sale is right for your buyer is the timeline involved with the transaction. Short sales often take longer than 60 days to get approved; by the time your client completes their final inspection and finalizes financing, another 30-45 days have passed. If your buyer needs to be in a new home by a specific time, you need to determine whether a short sale is the kind of listing they should pursue.
Determining early whether or not a short sale is right for your buyer is especially important for the seller, who is facing foreclosure. Accepting a legitimate offer from a qualified buyer gives them the best opportunity to prevent foreclosure and move on with their lives, and with new found hope for future homeownership. For the buyer in a short sale transaction, knowing they have helped another person avoid foreclosure can be very satisfying. (There is no main advantage to the buyer in a short sale, other than a possible discounted price—it’s lengthy and can be a hassle to buy a short sale home, however, it can be satisfying to know you’ve helped someone.)