Colorado Springs Vintage Homes Blog

5 things to know about buying a short sale home

Want to buy a short sale?

Related post:  Buying a short sale vs. a foreclosure, what’s the difference?

For a FREE List of Foreclosures and Short Sales email Kathy Torline at KTorline@msn.com

Do you have questions about buying a Colorado Springs home that is noted as a “short sale”?  Here are some of the most frequently asked questions I often hear from buyers, along with a brief answer. 

1. Is the Short Sale negotiation process the same for a short sale as for a regular sale?

Yes, except that there is one EXTRA layer:  After the buyer and seller agree on a price and terms, the seller’s lender (or lenders)  and other lien holders must also agree on the offer.   This can add anywhere from a month to 5 or 6 months to the process.   

2. Are loans types the same for a short sale as for a standard home purchase?

The type of loans a buyer can use are the same as for a standard real estate transaction.   But if the property is not in good condition, a buyer may not be able to use a VA loan or a FHA loan; as the property may come back with conditions from the appraisal process; and most sellers in a short sale situation don’t have the funds to make the requested repairs.    Most short sales are sold “as-is”.

3. What are some of the disadvantages of buying a short sale property?

It can often takes the seller’s lender(s) and lien holders a long time to respond to a offers, and a buyer can become frustrated and give up.  Also, some Realtors accept offers from several buyers, and submit all of these offers to the lender(s).  Consequently a buyer may be “bidding” by competing against others prospective buyers. 

If a buyer needs to have a house to move into in a month, a short sale is not a good option for them.  There is no guarantee on how long it will take the lender(s) to respond.

4. What are the advantages of purchasing a house that’s a short sale?

A short sale house may be priced slightly below market value.    But they are not at fire-sale prices.   But they can often be a good deal for buyers.

But for the best value, REO’s are usually priced lowest of all types of houses.  

5. How do I know if a house is a short sale or an REO or just a standard sale?

When viewing houses on various MLS-type databases, it may or may not be noted.   Your Realtor® can let you know for sure by checking the local multiple listing service database.

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Kathy (719-287-1049)   KTorline@msn.com

Tags: as is properties, bank owned properties, buying a short sale, colorado springs co realtor, colorado springs realty, colorado springs REO, real estate agent colorado springs

This entry was posted on Friday, April 17th, 2009 at 6:45 am and is filed under For Buyers, Foreclosures and Short Sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Denver CO Homes for Sale » Residential Real Estate Rebates….A Better Choice! said at April 20th, 2009 at 11:45 pm

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2. Englewood Homes | Englewood Homes said at April 21st, 2009 at 1:51 am

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3. new houses for sale said at March 21st, 2010 at 11:27 pm

   Thanks for sharing those info.Keep on posting!Looking forward to your next post.

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5. ayala land premier said at October 25th, 2011 at 1:27 am

   im planning to buy a home in colorado soon, thanks for the tips on loans
   -bianca from Ayala Land Premier

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7. Ayala Westgrove Heights said at January 15th, 2012 at 7:08 pm

   Thank you for this blog.
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