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Use Caution When Buying a Short Sale

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By : Roby Hicks    99 or more times read
Many think that buying short sale is always a good thing. They are able to purchase the property at a very low price. This way, they do not have to deal with expensive mortgages and high interest rates. There are benefits in investing in such homes. However, there are pitfalls as well. This is why you have to be very cautious if you indulge in such transaction. There is much to learn before you decide whether purchasing such property is a good idea.

First and foremost, you have to understand what a short sale is. It is a way of repaying the lender with the proceeds of the sale of the property. The loan balance is paid at a discounted value since the value of the property is less than the value of the loan balance. Since it sounds unfair for the lender, he has to approve this before the borrower can sell the property.

In order to participate in the short sale, the buyer and the seller has to be prepared. It is important that the buyer knows what he needs to do. The seller on the other hand should understand what would happen to him after he takes part of the short sale.

The buyer has to make an offer first before he gets the chance of owning the property. The offer is essential because it is part of the lender’s requirements together with the hardship letter. You should bear in mind though that different lenders treat short sale differently. The process involved varies. This is why you should have an idea of how it goes.

Bear in mind that making an offer does not guarantee that you will own the property. The property in the short sale may still be part of the active list of the different real estate agents. This means that the property you are interested in will still magnet some interested buyers. If their offer is higher than yours, then you will not be able to own the home. Another thing you should remember is that the seller is still in the application process when you made an offer. He should get approval first before he can sell the house.

The seller should be careful as well. Bear in mind that there are a lot of players in the real estate market and others are willing to play dirty just to have what they want. If you are the seller, beware of individuals who will force you to sell your home for a very low price. Sometimes they can be very persuasive. They might even scare and harass you. Know your property’s worth so that they cannot play you for a fool.

Many use short sale to prevent foreclosure. Others use this for financial relief. Whatever reason you have, remember that you have to be cautious. Look for the right home and make a reasonable offer. If you are the seller, see to it that you are careful with the parties you deal with. Doing this, will help ensure landing a good deal.
There are a lot of Residential Real Estate in Glendale Arizona. Find out more about them in Glendale AZ Home blog.

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