Buying a Short Sale in South Charlotte - Top 10 Things you should know!
With the number of short sales and foreclosures on the rise in South Charlotte, there are certain things that buyers should know before they journey down this uncertain and sometimes arduous path! As a REALTOR who has successfully closed short sales in South Charlotte, the biggest lesson that I've learned is that short sales are a moving target, and every transaction is completely different.
Here are my top 10 things you should know before buying a short sale in South Charlotte:
- Short sales can take a LONG time! If you need to buy a home quickly - to start a new job, or to get your kids into school - then a South Charlotte short sale may not be for you. It can take anywhere from 3 to 6 months or longer to close a short sale!
- Short sale success requires a LOT of patience! Although buyer and seller may reach agreement on a short sale contract in only a few days, it can take weeks and sometimes MONTHS to get approval of the contract or a counter offer from the lender(s) and investor(s) involved.
- Short sales may end up costing you MORE than you bargained for! My favorite Charlotte real estate attorney loves to remind my buyers of the short sale "Golden Rule" - He who has the gold (banks) make the rules! It's not uncommon for lenders to ask buyers to contribute extra money as a "credit to the bank" to make the deal work. Let's face it, the sellers often don't have money to bring to closing, so the banks go to other parties to the transaction to help recoup their losses (buyers and realtors)
- Short sale success depends on the competency/experience of the listing agent! If you learn that the listing agent for the short sale home that you want to buy has NEVER listed/negotiated/closed a South Charlotte short sale - your chances of buying that short sale home are greatly reduced! Your buyer agent has NO authority to speak or negotiate with the lenders involved, so you are at the mercy of the listing agent! You'd better hope that he/she is a good one!
- Short sale success requires a knowledgeable real estate attorney! You will need to find out early if there are liens on the short sale home you want to buy. Taxes? HOA dues? Mechanics liens? These liens must be paid off at closing by SOMEONE, or you may be left holding the bag.
- Short sale success requires a financially READY buyer! Cash is KING in short sales because the lenders involved don't have to rely on the buyer securing financing with their own mortgage. If you don't have cash, you should go BEYOND getting a pre-approval letter from your lender...go several steps further and get a LOAN COMMITMENT (loan approval pending an adequate appraisal - all documentation is supplied by the buyer UPFRONT and approved by the underwriters). Having a loan commitment when you submit your short sale offer will improve your chances of the short sale banks approving/countering your offer.
- Short sale homes may not be in the best condition! It makes sense...if a homeowner can't pay his mortgage anymore (for whatever reason - job loss, illness, divorce, etc.) then he probably hasn't been spending money on home maintenance and improvements. Many homeowners who are in default are very frustrated, and may even damage the home in spite.
- Short sale banks are not in the business of making home repairs! Most short sales are sold "as-is," and neither the seller nor the lender will make any repairs. Buyers must do their due diligence with an extra eye for any hidden costs that may pop up later. Remember, deferred maintenance can result in higher repair costs later.
- Short sale lenders can dictate the time schedule on a short sale! I've had buyers who were hesitant to spend money on home inspections, surveys and appraisals prior to obtaining approval of the short sale from the bank. Rightly so, as these costs can really add up. However, the banks will often come back with a directive to close the transaction in 2-4 weeks! I can coordinate the inspections and appraisals and get them done in 1-2 weeks, but I can't get a mortgage approved for my buyers! That's not my job! All the more reason for savvy buyers to get pre-approved BEFORE putting in an offer on a short sale.
- Short sales are not always the best deal! Some short sale homes are definitely priced well under market, but many aren't... and many are in such poor condition that the costs to restore or renovate the home will mean higher out-of-pocket costs for the buyer. For example, if you buy a short sale for $250,000, but it needs $50,000 worth of work, does it make sense to buy it when a move-in ready house down the street is selling for $289,000?
So...do you STILL want to buy a short sale home in South Charlotte? Although the process can be long and often frustrating for buyers, in many cases the buyer can get a great deal. Just go into it with your eyes wide open, because buying a short sale in South Charlotte can be like throwing darts at a moving target!
When it comes to such a huge financial investment, make sure you have Realtor with experience in short sales. Contact me with any questions you may have regarding short sales in South Charlotte.
Visit my website to search for homes for sale in South Charlotte. You can search by community, neighborhood, school, zip code, price range, you name it! I'm ready to be your trusted real estate advisor in South Charlotte!