Is a short sale home a great deal? You decide!
This depends upon a few different things, first how much the home initially is, second if the lender will accept your offer, third you've heard this before, location, location, location, forth, what the "real cost" of the home is.
While many great deals are out there classified as "Short Sales" there are a few things that a buyer should be aware of.
First and foremost, has the lender OK'D the price of this home? In other words told the listing agent that they will sell this home at a certain price? Its been my experience that there is some agents low balling the selling price of a home to get multiple offers on a home. Thus creating an auction like process.
Best suggestion before making an offer on a home is to check and see if there are multiple offers. This will not only influence your offer but, what you offer will be carefully looked over by the lender.
Another thing that many people don't realize is the cost of a short sale as lenders now are doing several different things to regain some of their losses.
First, they may try and negotiate an offer, by asking for a higher selling price. Second, they may ask that you pay the DOC Stamps on the Selling price of the home. Third, they may ask for you to pay Title Insurance, or possibly both. Forth, they may ask for the buyer to pay all Closing Cost. Fifth, many lenders will not turn on the electric or water for your inspections leaving you "in the dark" about what may (or may not) be wrong with the home.
So, let's take a look at a 100,000 home for instance. If you are asked to pay Title Insurance on this home, it could be around $775. Doc Stamps would run approximately $700. Of course commissions vary but with 6% commission your cost would be $6000. And, administration fees, they vary now anywhere from around $250 to $399. So you see, closing costs on a home really adds up.
Your $100,000. Home just cost you about $108,000. More or less. However, if you need to purchase a mortgage for this home there will be other charges, the mortgage company will charge you for the mortgage, this usually varies from lender to lender. Along with this charge there will be Escrow for the insurance company, (this is usually one year in advance) Escrow for your taxes. You may want a Home Warranty then there is another charge, and so on and so on.
So, it could be by the time you are looking to purchase that $100,000. Home it may cost you more like $120,000. Then it becomes your call if you think the home is worth the extra monies. By the way, the selling price of the home remains the same of $100,000. Don't forget, this process could take several months to complete!
PLEASE REMEMBER THESE ARE "AS IS" SALES
Hope this helps in your process of purchasing a "Short Sale".
Katie Creek
Florida Luxury Realty
727-415-4669
Katie Creek, Realtor and ASP (Accredited Staging Professional) in Hudson Florida. You can find out more information about Short Sales and the Short Sale Process on [http://www.SheSellShortSales.com].
When it's time to move, call me to get a representative on your side who has experience, market knowledge, and the confidence to help you make the best transaction possible. Or, View more information online at http://www.RealEstateHomesFlorida.com
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