For starters a home that is going to be sold through a short sale is when the home is sold for less than what is owed on the mortgage to the mortgage lender. The definition of a short sale does not matter from state to state or city to city.
Normally, when a home seller wants to sell their house they don’t have to get permission from their lender to do so. However, when the lender is owed more than what the house can sell for the homeowner has to get permission from the lender to sell the home for less. That’s why they call it a short sale.
From the perspective of buying a short sale there are pros and cons. We will cover some of them below.
There are two main advantages to buying a short sale home. First, you typically can get a very good deal by buying a short sale. In today’s interest rate market in late 2011 coupling a good deal with low VA rates, or other mortgage rates for that matter, you can get a really great deal. Second, you typically get a home that is in better condition than if you were to buy a foreclosure.
The main disadvantage or kind of buying a short sale home in Arizona is a you have to deal with the time that it takes to get through the lender approval process. The lender approval process could take four months or more. If you’re in a hurry to buy a house buying a short sale is not the way to go. You also need to be aware that the home could be sold from underneath you through the foreclosure process. So make sure you check with your real estate agent that there are no foreclosure proceedings started for the house you’re looking to buy.
Lastly, don’t pay for upfront fees. Communication is key. Don’t make ridiculously low-ball offers. Work with an experienced agent. And have a backup plan. Good luck buying a short sale.
