Short Sales | California Current

Short sales are nothing new, but the current housing market has put these little gems at the top of every bargain hunters list. Thanks to dropping home prices in California and tighter lending guidelines, you can expect to find a handful of short sales within your area. But, buyer beware. Short sales are not for the faint of heart and can often become more troublesome than they are worth. If you are considering a home that is offered as a short sale, keep these helpful tips in mind.

Be Patient
In a short sale, lenders effectively sell the house below market value and take a loss on their loan. As a result, you can expect every decision to go through a series of supervisor approvals and various department oversights. Sellers are facing financial hardships and lenders are combing through these transactions with a fine tooth comb. There’s nothing certain about short sales - but be patient and your time could pay off.

Investigate
Short sales often result from home owners who either faced financial hardships or were just financially irresponsible. The last thing you want to do is to buy their problems along with the home. Check for unpaid taxes, liens, debts, and any cloud left on the title.

Invest in Success
With the recent popularity of short sales, there are a number of individuals trying to ride this wave as well. Make sure you find a Realtor who has proven success in the very different world of short-sale transactions. Don’t be afraid to simply ask them how many short sale transactions they have completed in the past year.

Find Value
Short sales are sales where lenders accept a purchase price below the amount due on the loan. However, this doesn’t automatically mean you will score a bargain. Actually, you might find many short sales available simply because home prices were so highly inflated in these past few years. Make sure you get a complete analysis of the market area as well as recent comparable sales. Sure, it may seem like a bargain since you’re paying less than the previous owner; but if market values don’t support the sale price, well then that’s no bargain at all.

Get Ready to Buy
If you are serious about finding a bargain, you’d better be serious about buying. In a short sale transaction, everyone is likely to be at the edge of their seats. Make sure you get properly financed and have the means of actually paying once you find this bargain deal. Again, time is of the essence and lenders will have no choice but to process the home into foreclosure if that time runs out.

There’s definitely a lot of action in the short sale market, and with the housing market where it stands - you can definitely expect to see more of these so called “bargains” popping up. Just remember though, short sales are not some super secret get rich quick real estate scheme. Like any transaction, do your research ahead of time before rushing into your new home.