High cost of
living, being over indebted or losses of income can worsen the default on
mortgage payments. A short sale deals with the lender when the mortgagor can no
longer keep up with the payments and the outstanding mortgage is higher than
the property market value of the specific area. A short sale must be well
explained for the benefit of the seller and the buyer. This process takes
longer and is not the same as buying a marketable home.
When investing in a short sale thorough
market analyzes and calculations are recommended. The property can be in a
condition where renovations and reconstructions are required or hidden defects
that will impact the repair budget. A contractor is usually of great help to
estimate costs. These costs, together with the cost of maintaining the
property, are an expense one should spread over a reasonable period.
Maintenance, renovations and reconstruction is used to generate sales and can
be seen as an expense. Over capitalizing happens when what one indebted costs
more than the original value of the home.
Each short sale is different and has its
own merits. A lot depends on the lender and on the listing agent. This is a
time consuming process. Banks request a broker price opinion which takes a
while. To convince the bank to accept your offer, the comparable sales have to
support the sales price. The market value is determined by comparable sales of
the same area similar to the home in question and with a similar floor plan.
The expertise of a real estate agent is
essential when buying a short sale property. This is not a process that you
would undertake without being educated, having sufficient knowledge about. For
the best professional assistance we encourage you to contact us.