Short sale properties are homes that the seller is under water on, and the bank may be willing to take whatever the market will bare. For example, the seller may owe $100,000, but the most a buyer is willing to pay is $75,000. In this example, the bank will provide clear Title to the new buyer at a $25,000 loss.
The seller still has a negative mark on their credit but not as bad as a foreclosure and in many cases the seller may go back out in a couple years and secure credit again.
The seller may also be liable for a miscellaneous gain of $25,000, but please check with an accountant on this issue. In most cases the seller is already in a stressed financial situation and unlikely liable.
The buyer however, is responsible for all costs, fees, and expenses related to the purchase, and these properties are also sold totally “As Is”. This means that as the buyer you must secure the local Certificate of Occupancy. The buyer must be responsible for any termite damage and/or treatment costs. Any potential structural, mechanical, and environmental are also the buyers concerns.
The last issue with short sales is the length of time and mountain of paperwork that is involved. Please think long and hard before going after a short sale. The time and costs put on the buyer could outweigh any potential savings you realize from a perceived or real short sale sales price.
Please feel free to call us at #609-876-1095 to discuss the overall process and to arrange to tour a couple short sales.