Want to buy a short sale?

You may have heard that you can get a great deal in today's market by buying a short sale property. While in some cases that is true, there are many things to know. Boulevard Realty specializes in representing buyers with short sale transactions and we are well equipped to help you successfully close your purchase transaction.

Here are some commonly asked questions and answers regarding short sale transactions, from the buyer's perspective.  Call us now at 310-601-7875 or e-mail us for a FREE buyer consultation, or start searching for homes now!

What is a short sale?

A short sale, or short pay, is a real estate sale where there is insufficient equity in the property to cover selling expenses and pay off all loans and any other liens on the property, and the homeowner is unable to pay the difference. In a short sale situation, the lender is asked to take a negotiated settlement on the loan, or accept less than the full payoff.  For example, a homeowner owes $400,000 on a home loan and the property will sell for $350,000.  After selling expenses, there is only $325,000 remaining and the homeowner does not have $25,000 to pay at closing.  The lender accepts a "short pay" of $325,000 and forgives the remainder of the debt.

Why would a lender agree to a short sale?

The quick answer is that it is much more cost effective for a lender than foreclosure.  In actuality, lenders prefer short sales and are aggressively negotiating short sales if handled properly.  Foreclosure is expensive for lenders and they do not want to see families and individuals involuntarily lose their homes. The lengthy process of foreclosure in a declining market also means that the property will ultimately be worth less money when sold as compared to selling the property as a short sale.

How great of a deal can I get by purchasing a short sale?

While each transaction is different, in most cases a short sale will be sold for under fair market value.  This is due to the fact that short sale transactions typically take much longer than traditional sales and are sold in as-is condition.  Similar to a lender owned property, the seller typically is unable to make any repairs to the home or provide any credits to the buyer and the buyer  must therefore purchase the property "as-is."