Over the past few years the term short sale has been mentioned a lot. Unfortunately, many people have a misunderstanding of what a short sale actually is. A true understanding of a short sale is the key piece of information every buyer needs before starting down this road.
Before jumping into what a short sale is, let’s start with what it’s not. A short sale is not a foreclosure, though many potential buyers tend to interchange the two terms. A foreclosure is the process of taking possession of a mortgaged property due to the homeowners failure to keep up with payments. This is a done deal. The homeowner hasn’t upheld their end of the bargain. As a result the bank is taking the house from them.
Short sales avoid the foreclosure process. A short sale is is an arrangement between the homeowner and the lender to accept a price below the amount owed on the property.
There are many pluses and minuses to choosing to buy short sale over a foreclosure. The biggest advantage that turns people toward the short sale is the condition of the average short sale home. While short sales will still likely require some TLC, they tend to be in better condition than the average foreclosure. The reason: when a homeowner choosing to go through the short sale process, they are generally doing so to avoid being kicked out of their residence. The previous homeowner is still living in and maintaining the home. Foreclosures often sit vacant and untouched while waiting to be purchased. Any damages are not repaired and there is no effort to prevent normal wear and tear.
While some argue the purchasing process is easier for foreclosures, the increased chances of less updates is often what tips the scales in the direction of short sales. Neither can offer a “move-in ready” residence, but a short sale can offer less repairs once the home becomes yours at a lower price than the regular market.
If buying short sale is a potential option for you or if you would like more information on short sales in Pender, New Hanover or Brunswick Counties contact Nilesh Jethwa at (910) 622-0319.