Due to the decline in real estate values over the past few years, many homeowners who are attempting to sell are “underwater” . This means that they owe more on their mortgage than their home is presently worth. If you are considering making an offer on such a property, you should prepare yourself for a longer period of time until closing. That is , if in fact you ever get to closing. Remember that in order for your purchase to be completed, the seller’s lender must approve the selling price. With interest rates at record lows, you may be looking to lock in at a low interest rate. If the closing is delayed due to the seller’s lender not making a decision for several months, you may end up with an expired lock in agreement which will cost you additional money to extend. Additional frustrations arise simply based on the inability to finalize plans to move. Remember, the seller’s lender is not a party to your contract with the seller. So even if the seller signs the contract agreeing to close within 2 months, if the seller’s lender takes 6 months, you are left in limbo on your purchase. It is for this reason that it is imperative that the contract give you the right to cancel after a certain period of time (usually 3 months). Thus, you must carefully weigh the potential disadvantages outlined above against the potential advantage of the good price point for home due to the short sale price. I can share with you that approximately 50% of the short sales I have been involved in have been cancelled over the last year. The percentage cancelled was even greater 3 years ago (approximately 75% cancelled). The decision is yours to make in view of these facts.
Please contact me either by phone at 718-377-8880 or e-mail at firstname.lastname@example.org if you would like to discuss your potential purchase.