A short sale might sound like a quick and simple way to buy a new home. Home buyers who decide to go the short sale route can save a lot on their new property. But short sales aren’t always the easiest option.

What Is A Short Sale?

A short sale happens when home sellers put their homes on the market for less than what they owe on their mortgage. This method has happened more often in the last few years, and lenders tend to prefer short sales over foreclosures. Unlike foreclosure, where the home must be vacated, a short sale allows owners to stay in the home. This helps ensure that the house will be maintained.

What Are Short Sale Disadvantages?

• A Long Process – Unfortunately, it takes a long time – usually seven months – for short sales to close. This can pose a problem if you need to move into a home right away. Additionally, the long process may prevent home buyers from getting a low interest rate.
• Complications with Lenders – Lenders won’t always approve an offer. And if they do, you’re not out of the woods. Sometimes lenders expect the home buyer to cover the costs for inspection and appraisal, make repairs, and even have the utilities turned on before the closing.
• No Guarantee – If the deal doesn’t go through, you could lose the money for those upfront costs. And if the closing doesn’t happen by the date the lender sets, the bank could foreclose on the property even if you’re approved.

What Are Short Sale Advantages?

• A More Streamlined Process – Though the short sale process sounds long and complicated, automated processing has made it more efficient for lenders and home buyers.
• Saving Money – Even with the upfront costs, you can get an amazing price for the home you’ve always wanted. Knowing your budget and time frame can help you determine just how much you can gain through a short sale.

If you’re searching for a home in the DC area and have questions about short sales, please let me know. I’d be happy to help!