When a homeowner can’t make their mortgage payments, they may explore the options they have to get rid of the home. This is sometimes as easy as seeking to sell the home, but that decision isn’t as simple if the market has taken a downturn and the home isn’t worth what’s still owed on it.
If that’s the case, the homeowner may explore the option of a short sale. This means that the mortgage company allows the homeowner to sell the home for less than the balance owed on the mortgage. This is an alternative to foreclosure, which can help to get the homeowner out of a difficult financial situation.
What should buyers expect during a short sale?
Buyers should be prepared to purchase the home in as-is condition. This typically isn’t negotiable, so it’s highly unlikely that any repairs or negotiations will be made. It’s a good idea for potential buyers to have an inspection done on the home so they can determine if they have the financial backing to make the necessary repairs.
Individuals interested in short sales should also know that these transactions aren’t usually completed quickly. Instead, petitions have to be sent to the lender for approval. This process can take weeks or months, depending on how the lender handles matters.
Buyers and sellers should expect to have more paperwork than in a regular home purchase. It’s best that both sides work with someone familiar with this process so they know what to expect and can protect their own interests during this journey.