Anyone who has ventured into New York's residential property market recently knows that apartment and condo prices in the city are at an all-time high. People who are in the market for a new home may wonder whether they can get a good deal on a short sale. They may be able to in some cases, but a buyer should be prepared for some delays and uncertainty.
A short sale typically occurs when a homeowner is underwater on the person's mortgage and is having trouble keeping up with the payments. The owner puts the home on the market for less than the amount owed on the mortgage, and hopes the bank will agree to accept the lower price in order to avoid the expenses and difficulties of a foreclosure.
The purchase agreement in a short sale will ordinarily state that the sale is contingent on the bank approving the price and other terms. For a buyer, one of the major disadvantages of a short sale is that banks often take weeks, or even months, to respond to a buyer's offer. A buyer may wish to keep looking at other properties while waiting to hear back from the bank, and it's a good idea for the buyer to include a provision in the purchase agreement that allows the buyer to back out during that time.
It may be possible to find a good deal on residential real estate in a short sale, but the purchasing process can be drawn-out and frustrating. Someone considering a short sale transaction can benefit from having an experienced real estate attorney looking out for their interests.
Source: Investopedia.com, "Purchasing A Short-Sale Property," Amy Fontinelle, accessed April 3, 2016