Are you considering adding another property to your portfolio? Then you should think about making an offer on a short sale as chances of you getting a great deal exponentially increases. What’s a short sale? it’s a sale that occurs if a home is being sold for less than what the bank or lender is owed. Homeowners are often compelled to go for a short sale due to a number of reasons including job losses, excessive borrowing, and declining home values.
However, a short sale in Houston, Texas is not similar to foreclosure. Foreclosure is when the mortgagor repossesses the house, and sells it themselves. Most of the time, Houston homeowners opt for short sales to avoid foreclosure.
Even though purchasing a short sale in Houston, Texas is a great opportunity especially for an investor, it’s not that easy. You need to be aware of several pitfalls while how to make an offer.
Tips on how to make an offer on a short sale:
Do you research
Before you make an offer, perform your due diligence. You’ll realize that short sale listings are all priced below the normal market value so as to attract more potential buyers. But it’s not a guarantee that your lender will be okay with a low pricing. So it’s crucial you use the real estate comparables, to carry out a comparative market analysis.
Find out if the bank has approved a short sale in Houston, Texas
Not all lenders will approve a short sale in Houston, Texas. Don’t think that just because so many homes have been listed as short sales, they’ll be handled as one transaction. there are times when going into foreclosure offers a better deal than working with a short sale.
This will show how serious you are about buying the property. Of course, you are only required to pay the minimum deposit amount, but if you’re keen on winning, you need to go the distance. For instance, if you want to get the lender’s attention, you should put down a deposit accounting to 3 percent of the sales price.
Sort out your finances
It’s normal for a short sale seller in Houston, Texas, to want to know if you really have the financial capability to make the purchase or not. So to increase your chances of being successful, you should either get a pre-approved letter from your lender or buy the property in cash. A pre-approved letter is just a document showing the lender’s commitment to give you mortgage.
Don’t ask for contingencies
A short sale is not a traditional sale where you can negotiate contingencies to minimize closing costs and cover different fees. In this case, the lender has already gone through some losses. There’s no way they’ll readily or willingly approve contingencies especially if there are several other offers besides yours to consider.
To learn more about short sales in Houston, Texas, call us today.