Envisioning your dream home in St. Louis is easy; being able to afford, on the other hand, is another matter altogether. That is why, when you see such a home listed at what appears to be below market value, you may think it too good to be true. In such a case, the listing may be a short sale. Many have come to us here at TDD Attorneys At Law LLC inquiring as to the wisdom of pursuing such properties. Our answer is always the same: to weigh the pros and cons of short sales before making a decision.
Freddie Mac defines a "short sale" as a situation where the homeowner attempts to sell a property for less than the balance owed on the mortgage. This is usually done when he or she wants to sell and move out quickly. In many cases, it may not signify that there is something wrong with the property, but rather that the owner simply cannot afford to make the payments on it. The entire transaction, however, is contingent on the lender accepting the lower payoff amount.
There are certainly advantages to you going after a short sale listing. These include:
- Getting a good deal on a premium home
- Dealing with less competition (many buyers are scared off by short sales)
- Eliminating the risk inherent with buying a foreclosed property (homeowners often neglect foreclosed properties prior to leaving)
At the same time, short sales do present certain risks. Your transaction can take longer as the lender weighs whether to accept the offer or pursue foreclosure. In such transactions, you also typically have to buy the home "as is," which leaves litte room for negotiation. You can learn more about the details of real estate transactions by continuing to explore our site.