Short sales are a different type of purchase than regular home sales. Before looking at or purchasing a short sale, it is vital that you understand what they are and how they work. The following provides some general facts on purchasing Boston short sale homes.
Short Sales Defined
Short sales describe homes where the proceeds from the sale will not exceed the balance on the mortgage, and the property owner has no savings to cover the difference. Expenses related to the sale can include the mortgage(s) on the property, real estate broker commissions, closing fees, and other related charges. The lienholders on the property would be “short” what is due/owed to them, which is where the term short sale was derived. The banks currently owning the liens on the property must all be willing to accept the shortage for it to complete. This is why it can get complicated. Lenders will not grant approval unless there is an offer from a buyer. Homes marketed as short sales can only be purchased subject to this approval, and there are no guarantees that it will be.
Short Sale Perks
The amount of short sale inventory listed reflects the condition of market. At certain times, there might be a lot of listings. Short sale listings are usually a chance for home buyers to secure a great deal on homes. However, they do not accommodate the needs of all home buyers.
Disadvantages of Short Sales
Short Sale Timelines
Buyers must move forward with an offer without any indication that the purchase will actually be approved. It can also take a long time to receive word of the status (commonly a few months or even a year). Thus, short sales may not be good options for people who need to close quickly.
Repairs Required with Short Sales
Short sales usually need a lot of repair. They are typically sold as-is since the owner has no money and the lenders are already accepting less than the balance owed. Home buyers should be prepared to address renovations with their own money.
Purchasing Boston Short Sale Homes
Short sale listings do not fit all buyers. People must be aware of the benefits and risks before viewing or submitting an offer on them. For buyers with time to spare and the capability to make repairs, it may be a great way to save money on a purchase. Consult with your buyer agent for more advice on purchasing Boston short sale homes in your city or town.