Exploring the Opportunities of Short Sale Real Estate Deals in Scottsdale
If you’re the kind of person who is always looking for a deal or wants to get into the Scottsdale area real estate market at a reduced price, consider buying a home on a short sale. A short sale occurs when the property owner is in financial trouble and sells their home for less than what they owe on the mortgage. Buying a home in this manner allows you to get one for a significantly lower price than you would through a traditional home sale.
Short sales allow owners and lenders to extricate themselves from a difficult financial situation. They differ from foreclosures in that the seller initiates the proceedings. On the other hand, a foreclosure is a legal proceeding started by the lender to recoup losses from an unpaid mortgage.
Short Sale Advantages and Disadvantages
When done correctly, buying a short-sale home in Scottsdale or one of its adjacent communities means you would own the luxury home of your dreams for tens of thousands of dollars less than its actual worth, sometimes even more. These homes can make excellent investments for the right buyer. Many residences in our area have been lovingly maintained, making them less risky than short-sale homes in other areas.
However, as a potential short sale buyer, you should know the drawbacks of buying a short sale home. The process can become long and drawn out, increasing the riskiness of the transaction and negatively impacting buyers. A short sale usually takes longer than a traditional home sale because the lender will attempt to recoup as much money as possible in the transaction. Short sales are sold “as-is” without typical seller disclosures, so the home’s condition and quality are unclear. You’ll also need to do a lot more work upfront to determine the home’s value and other necessary information to determine whether the purchase is worthwhile.
The Holm Group’s Recommended Short Sale Task List
Whether you are an investor or want to get into that special home, we recommend should do the following to make the short sale process easier.
- Find potential short sales in your target area. You can find short sale houses by searching online, looking through public courthouse filing or working through a qualified Realtor like The Holm Group.
- Research home values to get an idea of the price of comparable homes by reviewing recent sales in the area.
- Visit the home to assess the property’s quality and get a sense of how much you’ll need to fix it.
- Sort out liens and other outstanding items with the lender. Before committing yourself, double-check this information by asking a title company to do a title search on the property.
- Prequalify for a mortgage. While obtaining preapproval before making an offer is always beneficial, it’s more important in a short sale, as you can prove to the lender that you can purchase the short sale property.
- Present papers and make an offer. Use your research to make a fair offer, keeping in mind that the lender wants to recoup as much of the remaining mortgage balance as possible. The lender likely must meet investor guidelines to accept the offer. Be prepared to negotiate and determine the maximum you’re willing to pay.
- Get a home inspection. Even though you won’t be able to negotiate a lower purchase price if there are problems with the property, you should know the home’s actual condition before you decide to close on it.
- Close on the property. After the lender has accepted your term, you must ensure that the lender and other lienholders are willing to release the collateral. The more lienholders there are, the longer the process can take.
The experienced Scottsdale area real estate agents at The Holm Group can help you find short sale houses and help you navigate the process. Contact Andrew today started by calling 480-206-4265.