Setting Short Sale Expectations During a Real Estate Transaction
When setting short sale expectations during a real estate transaction, it is crucial to understand that many steps should not be skipped. Overall, short sales have plenty of appeal. Homeowners interested in a discounted price or a strict budget to be great candidates for an Illinois short sale.
In general, homes listed as short sales value below market rate. Short sale homes seem like a perfect bargain for prospective buyers, especially first-time home buyers. Although short sales appear to be lucrative real estate opportunities, set expectations prior to going ahead with the process.
What is a Short Sale?
A short sale occurs when a homeowner needs to sell their home quickly due to financial problems. When a homeowner cannot keep up with mortgage payments, the lender sends the property to a short sale. This also helps homeowners who face deep financial woes.
Setting Short Sale Expectations in Illinois
Short sales occur when a real estate transaction meets four criteria:
A hardship exists.
The current value of the home is less than the amount owed plus closing costs.
A buyer exists for the home that isn’t related in any way to the seller.
There is no better alternative.
After a short sale, the home lender receives the sale proceeds. These proceeds go towards paying off the accrued mortgage debt. In general, short sales are preferable to foreclosures because the homeowner does not have to wait for bank foreclosure. Instead, the homeowner initiates the short sale to rapidly pay off outstanding debt.
This presents a wonderful opportunity for many potential home buyers. While home buyers face a great home deal, setting short sale expectations is just as prudent.
Setting Shot Sale Expectations
First and foremost, home buyers should seek out a property inspector. Property inspectors investigate potential home issues prior to closing. In many case cases, property inspections dig up previously unknown or undisclosed problems with the home. Ultimately, this helps home buyers make an educated financial decision as property inspections. Even if a property is being sold “as-is”, a property inspection informs home buyers of potential repair costs that await them down the road.
Additionally, prospective home buyers should pay close attention to the offer they make. Lenders might be motivated to sell. However, lenders still wish to earn money from the real estate transaction. While short sales offer discounted pricing, home buyers who offer realistic numbers tend to win out on these opportunities. Therefore, lenders want buyers who are committed to the sale.
Above all, when setting short sale expectations, both home buyers and sellers should prepare for a more complicated process. Short sale homes tend to be sold “as is”. Without the normal disclosures, this makes them riskier opportunities than traditional home sales. In doing so, the deal can be less fair towards the buyer in that regard.
If getting involved in a short sale, buyers protect their interests by hiring a real estate attorney to represent them. For legal guidance on Illinois short sales, contact an Illinois real estate attorney at Lee Scott Perres, P.C.
