5 Disadvantages of Buying a Short Sale
There are many reasons to purchase a short sale, ranging from a lower sale price to becoming the proud owner of a beautiful home. However, the disadvantages of buying such a home can outweigh potential advantages.
To help you decide if a short sale is right for you, here are five essential drawbacks you should consider before house hunting for a short sale property.
- Buying a short sale can be time-consuming.
Although purchasing a short sale is similar to buying any other type of property, the offer is subject to lender’s approval even if it has been accepted by the seller. What’s more, if the property has multiple mortgage liens, all lenders must agree to the short sale, which might take several weeks or months. If one of the parties involved rejects the offer, the transaction cannot be finalized.Therefore, a person who intends to purchase a short sale should be prepared for a long process that might not deliver the expected results. Furthermore, with your down payment tied up in a lengthy short sale process, you can miss out on other great opportunities.
- A short sale might not deliver the best deal.
When it comes to short sales, lenders try to recoup as much of their loss as possible. As a result, most of them will only approve the sale if the price is high enough to recoup their investment.In Florida, deficiency judgments are also allowed. This means that a lender can require a seller to cover the difference between the outstanding mortgage amount and the sale price of the home. Since getting as much money as possible is in the seller’s best interest, most sellers won’t agree to sell their homes for less than the balance remaining on the mortgage.
- A short sale is sold “as is.”
As the owners of short sales often encounter financial difficulties, most of them are unable to do any maintenance and repairs. Consequently, another disadvantage of buying a short sale is that it might require costly repairs due to lack of maintenance. Even though the buyer can have a home inspection performed by a professional appraiser before committing to purchasing a piece of property, there’s no guarantee that the lender will offer a concession if any repairs are needed.
- Short sales can spark a bidding war.
In general, short sales are attractive to buyers because some of them sell below their estimated market value. Unsurprisingly, many individuals and investors are in the market for short sales these days, which can generate a bidding war between potential buyers. Since some investors have enough cash to purchase a home outright, buying a short sale can be difficult for someone who is not a “professional buyer” and intends to buy a home with the help of a mortgage.
- You might not be able to get the home you want.
This is one of the biggest disadvantages of buying a short sale. Unlike purchasing a traditional home or building your own home, buying a short sale involves picking from a short list of properties that might be located in an area you don’t like or might not include all the amenities and features you want.
Considering all these disadvantages, you need to be prepared to make some compromises if you’re looking for a short sale in Northwest Florida. Or better yet, you can get your dream home, in a great community and without any ifs or buts about it.
The only thing you need to do is contact us at Whitworth Builders, and we can help you get the right brand-new or pre-owned home for your family.