Are there risks when purchasing a Short Sale? It is predicted that the 2021 Real Estate Market may see more Short Sale listings than in years past. This is sadly due to homeowners who were unable to make their mortgage payments throughout the Pandemic and thus, turned to a Short Sale in an effort to sell their home. As with all real estate purchases, you generally will always have at least a little bit of risk involved, however, when it comes to purchasing a Short Sale, you may end up having more risk than you initially thought.
Getting Out Bid
Short Sales are generally always priced to sell, and this often will attract multiple buyers. If you are not prepared to offer a large down payment, then you may run the risk of being out bid. Short Sales see a lot of all cash offers, and thus, Short Sales tend to be harder to purchase for those who secure and plan to use financing options.
Running out of Time
If you need to be into a new home soon, or have a specific time frame you are hoping to stick to, then purchasing a Short Sale may not be the purchase for you. Short Sales are notorious for taking a long time to close, generally 4 months on average. If you are not in a position for a potentially lengthy close, risking the timeline you are hoping to stick to could prove to cause problems.
It is very easy to set a budget, find a home within that budget and expect that to be the only numbers that are in play. Unfortunately, when it comes to a Short Sale, many people don’t budget for the potential damages and repairs that may be needed. Short Sales will generally need repairs and upgrades of some sort, whether minor or major. If you do not budget accordingly, you may risk running out of finances when choosing to purchase a Short Sale.
As mentioned above, there is no “perfect” house and thus there will always be a slight risk when it comes to purchasing real estate. Whether you plan on purchasing a Short Sale or not, it is always important to ensure that you have a qualified and trusted agent by your side to help you navigate through your purchase, answer your questions and help point out any red flags or risks that they may see.
If you’re currently searching for a new home within the Niagara and Orleans areas, are in need of a qualified seller’s agent to help you list and market your property, of if you have any general questions regarding New York Real Estate, please feel free to contact our office at any time.