When you hear about real estate these days, these terms come up often: “short sale” and “foreclosure.” For the potential home buyer, these phrases can evoke both interest and fear. Interest because it sounds like the potential for a great deal, and fear because of the potential to end up in the same boat.
But what is a short sale? Is it an opportunity for a good investment? Is it right for you?
What is a short sale?
A short sale is a strategy for home owners to avoid foreclosure when they can no longer afford the mortgage on their home. While it used to be relatively uncommon, it is becoming increasingly prevalent.
If a lender agrees to accept less than the amount due on a home loan, this is considered a short sale. For obvious reasons, lenders will not always accept a short sale and may prefer to foreclose. In some situations, the lender determines that it is more economical to accept a “moderate” loss offered by a short sale.
Is a short sale a good opportunity for home buyers?
For a home buyer, it can be a possible opportunity to get a home for a “low price.” But this lower price can come at a cost. Short sales are notorious for taking a long time, being stressful and falling through.
Two common reasons that a short sale falls through is that the potential buyer becomes frustrated with the long process, or the lender does not accept the offer.
Is a short sale right for you?
If you are interested in learning more about “short sales,” you can speak with one of Colorado’s Exclusive Buyer’s Agents. They will be able to discuss your specific situation and the pros and cons of the short sale process so that you can determine whether this is something you would like to pursue. We can help you find an agent now.
