The reality is that not everyone can pay their home loans on time. There are some who are unable to make payments several times, and the lender eventually puts the property up for foreclosure. If the homeowner doesn’t want their property foreclosed, then a short sale is often a good option. Typically, the lender and the homeowner will make an agreement to sell the property (the property’s value should be less than the current mortgage amount).
Having said that, here’s what you should know about short sales in San Antonio:
What’s a Short Sale?
Short sales occur when a homeowner is in financial distress and is unable to make mortgage payments. The seller will often initiate a short sale to avoid foreclosures. Typically, short-sale homes are sold as is, and that means you’re unable to negotiate on price in exchange for needed updates and improvements (you also cannot ask the seller to repair the home).
What’s the Difference between a Short Sale and a Foreclosure?
With a foreclosure, the lender often repossesses the house and then tries to sell it to recover its costs. On the other hand, in short sales, a lender accepts that they won’t recover the cost, and hence considers a short sale as a better option instead of dealing with the red tape involved with foreclosures.
What are the Benefits of Buying a Short Sale?
- Better Price. Since the seller wants to avoid foreclosure and the lender wants to recoup losses, you could be in a better position to negotiate for a lower price in short sales.
- Less Competition. The uncertainty of the time frame and complexity of short sales often dissuade some buyers, which means less competition!
Are there Drawbacks to Buying a Short Sale home?
- It Takes Longer to Close. Buying a short-sale property has a significant caveat- you won’t be negotiating with the seller only, but rather the seller and their lender. As such, any offer you submit will have to be approved by the respective lender, and that could make negotiations last a bit longer.
Buying a Short Sale in San Antonio: Don’t Skip Inspection
Banks and lenders are required to disclose issues with the house like a seller in a conventional property sale would have to do. And even though the short seller will complete the disclosure form, they might not be up to speed on routine maintenance. That’s why in a short sale, you shouldn’t skip the inspection. A home inspection can reveal hidden issues such as electrical issues, mold, mildew, or termite infestation.