You’ve found the perfect house — it’s in the right Fairfield neighborhood, it’s zoned for a good school, and the price is just right. What could go wrong? A lot, if the home is being sold as a short sale. Whether you’re a first-time buyer or veteran homeowner, buying a short sale home can be a challenging and frustrating experience.
Here, I offer some background and advice for those looking to buy a Fairfield short sale.
What is a Short Sale?
Let’s begin by defining the way that a short sale is different from a traditional real estate transaction. In a short sale, the sale of the property in question is listed at a price that is lower than the amount of the outstanding debt. It is typically used by sellers as an alternative to foreclosure. Unlike a normal home sale, the seller must obtain approval from their lender before proceeding as the lender is agreeing to “write-off” the difference between the sales price of the home and the balance left on the mortgage. Because the lender is taking a loss on the sale, they often take their time in ensuring that they are getting the best possible deal before approving any offer.
Benefits of a Short Sale
Why buy a short sale home? Simple, for both seller and buyer, a short sale offers attractive perks. For the seller, a short sale enables them to avoid foreclosure and the financial burdens associated with it. For the buyer, a short sale means a highly motivated seller. This often grants them better leverage, and (naturally) lower prices.
However, this isn’t a reason to cut corners or overlook major issues. If anything, a short sale requires even more attention to detail than a traditional real estate sale–and infinitely more patience.
Short Sale Tips
Here are some important tips to keep in mind as you start on your journey to buy a Fairfield short sale home.
Don’t Cut Corners
One of the drawbacks associated with a short sale is the power that the bank exerts over both seller and buyer. Many buyers may feel pressured to compromise their standards in order to just ‘get through’ the process. Don’t. Remember that if all goes well, this will be your home. Make sure that all necessary inspections are conducted, and that affairs are in order; in other words, cross the t’s and dot the i’s. Similarly, if you are serious about purchasing a short sale, go through the trouble of getting fully approved for a loan, rather than just pre-approved. Because there will likely be multiple bids on the short sale home and because you want to get the home at the best possible price below market, being fully approved for the loan amount will make your offer stand out with the lender as most other bidders will only be pre-approved and still face the risk of their financing falling apart before closing (Stuck and need immediate advice? Call me now – I can help).
Keep Your Wits About You
In the same vein, remember to keep your emotions in check. Short sales don’t happen overnight. With lenders often having a backlog of short sales to process, it can take 90-120 days to complete a short sale. While you may get discouraged during the process, don’t lose sight of why you are pursuing this particular Fairfield home (good neighborhood, great price, etc…). At the same time, don’t look past major red flags (like structural problems or glaring legal issues such as liens) or let the as-is nature of a short sale land you in a bad situation in the long-term.
Build a Strong Team
Short sales require patience and expertise; finding a group of professionals who will work together to achieve your goals is the best way to set yourself up for success. A short sale experienced real estate agent is a must and can make the difference between success and failure. Additionally, a real estate agent who’s an expert in short sales will have strong relationships with banks, be able to bring in a patient lender and a seasoned escrow officer, both of whom will be critical to successfully execute this purchase. This team will be your greatest allies during this process — choose reputable short sale real estate professionals who understand your needs and you’ll be surprised at how much easier buying a short sale home in Fairfield can be!
I have extensive short sale experience and can guide you through the process. Ready to start your short sale property search here in Fairfield? Give me a call—I can send you new listings that meet your criteria the instant they come online!