Thinking of buying a short sale property?
It can be a good decision if you want to buy a property at a lower price but short sale comes with its disadvantages. There are certain risks involved in investing in a short sale house.
Here are some reasons why you should think twice before investing in a short sale house.
Disadvantages of Short Sale
It Is a Long Process
If you are looking to buy a property quickly, then a short sale is not the best option for you. Approving a short sale is a long and tiring process and may take up to a year to finalize. A number of factors determine the time for approval, which can become really frustrating for the buyer.
Mortgage Lender’s Approval Is Necessary
If you are buying any typical property, you only need to get the approval of the person who owns the property. This is not the case in short sale. In these cases, you also need the approval of the mortgage lender. This is because you are trying to get them to accept less than what they are owed for the specific property. Thus, it takes a lot of time to convince the mortgage lenders that make buying a short sale a long and tiring process.
Opportunity Cost Is High
Another shortcoming of buying a short sale is that it makes you miss out on other good opportunities. This is because the process of short sale approval is so long that you might miss out on other potentially better purchases and properties.
These were some common disadvantages of buying a short sale. Make sure you understand the risks of investing in a short sale before you go on and make any final decision. Your time and resources will be stuck in a short sale for a long time. If you don’t want to miss out on other better opportunities, then it is better to make smart and informed decisions.