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? It’s been my experience that there are some agent’s 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, be aware 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. Of course, you can pay for this if wanted.
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. 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 can 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. All the while, this process could take several months to complete!
Hope this helps in your process of purchasing a “Short Sale”.
Katie
Florida Luxury Realty
727-415-4669
The FCT Mortgage Assistance Relief Services know as (MARS) are asking us to put this on all our advertising:
Florida Luxury Realty is no associated with the government and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage you could lose your home and damage your credit rating.