Real estate buyers looking for a short sale will find that when they are prepared to make an offer on a home or commercial property, that it is important to review the details to the deal. Short sales are an option when a seller is on the verge of foreclosure. When a property is already listed for foreclosure auction, a schedule of activities is announced in publication for potential buyers to peruse.
The advantage of purchasing short sale over auction is that precision in contract allows for the purchaser to see the property before the seller has given up the holding to auction. This ensures that the seller still retains some of the value, and that the property will likely be in better condition. Sellers are also able to extract some equity out of the lower than market priced property, and also salvage their credit.
For buyers, a short sale property is optimum in terms of return on investment as the home; building or land is attained at under market value. Significant cost savings of up to nearly half of the full market value is savings in the pocket. Unlike auction, inspection of the property enables a buyer to feel secure that the total valuation of the property will be sustained at time of signature on the title transfer.
Short sale buyers also avoid the complications of overdue mortgage delays and other headaches posed by foreclosure auction deals. Right of redemption adds security to the transaction as well. The original owner may not repurchase the property after it has transferred to the new owner under any condition.
Most short sale property sales are set up to cater to the buyer. This practice can include updates and minor rehabilitation as stipulated in the buyer’s offer of purchase. Once the contract is signed, the previous owner can often live or use the property during the tenure stated in the agreement while those repairs or alterations are taking place.
Many sellers cite that the best part of a short sale deal in addition to return on original investment, are special conditions to contract. Some short sale agreements include a limited lease contract whereby both parties mutually assent to repairs and maintenance of the building in exchange for reduced rent beyond the standard purchase contract.
In sum, the benefits of short sale are a more amicable, value-focused transaction that encourages care to the property prior to final transfer of title. Short sale buyers are keenly aware that they are getting an under market real estate value. Sellers are able to use the short sale mechanism to control for potential loss of value already invested in a property that would otherwise end up on the auction block.