How to Buy a “Short Sale” Home In Wilmington and Leland NC
What you need to know before buying a short sale home
A short sale is defined as a transaction where a lender permits a home owner to sell their home for less than the amount of their mortgage. In most cases, the mortgage lender will not require the seller to pay any shortfall or deficiency. In addition, the mortgage lender will usually allow the expenses of the seller such as real estate commissions and conveyance taxes to be paid as part of the transaction so the seller does not have to pay them.
Short sales are listed with Realtors on the Multiple Listing Service just like regular home sale transactions. The only difference is that the listing must include the phrase “subject to lender approval.” That key phrase indicates that the transaction will be a short sale. The primary difference between a regular transaction and a short sale is the short sale must be approved by the lender as well as the sellers.
Why would a mortgage lender permit a short sale and take a loss?
With the recent drop in home values, millions of home owners have homes worth much less than the amount of their mortgage loans. For the home owners who have to sell their home due to hardship such as job loss, they are unable to sell their home without a short sale transaction. Mortgage lenders do not want the expense and liability of foreclosing, so they offer to let sellers sell and take a small loss now rather than foreclose and take a larger loss later.
What is benefit for home owner?
The main benefit to the home owner is that they can sell their home and get on with their life without being saddled with the amount of their mortgage that exceeds their home value.
Why is it great for you the buyer?
The simple answer is that you will be able to buy a home at a lower price in better condition than if you purchased a foreclosure. Sellers are getting out of their situation thanks to the lender, so they have an incentive to keep the property in good condition so you will buy it. Just as important, sellers are not getting anything out of the transaction so they do not care what the selling price is as long as the bank lets them out of their debt.
How do you Buy a Short Sale?
- Contact an expericed short sale agent
- Find the home you want that is a short sale.
- Make your offer but include comparable sales to justify your offer
- Follow up with the seller to make sure they submit their request to their lender.
- Be ready to close quickly (once lenders approve a transaction, they want to close fast)
By working closely with your Realtor and the seller, you can buy a home for below today’s low market values in better shape than any foreclosure you will find.
NILESH JETHWA WILMINGTON NC SHORT SALE EXPERT