Making an offer on a short sale property

On Behalf of | Feb 8, 2019 | Real Estate Transactions

If you are attempting to buy a short sale home, this can potentially be a lucrative deal because it can be possible to get a home under the market value. However, there can be complications in the procedure that you should be aware of before embarking on the journey.

A short sale generally means that the seller of the property is struggling financially, and therefore, can no longer afford their mortgage payments. Therefore, they are under pressure to sell the home as quickly as possible. The bank that they are in debt to will ultimately have the power to decide whether the sale price is adequate; therefore, this is the party that you will need to appease.

What the banks consider before accepting a short sale offer

The banks have two options during a short sale. They can either accept a short sale offer, or they can decide to go through the process of foreclosure. Therefore, if they calculate that they could get a significantly better price by going through foreclosure, they will do so.

How can I decide what price to offer?

The first thing you should do is to gain a good idea of the market value of the property. You can do this by looking at recent sale prices of similar properties in the area. You may be successful if you place an offer that is between 5 and 10 percent lower than the current market value, but ultimately the bank will make the decision on whether to accept.

If you want to buy a short sale home, it is important that you understand how the New York law works in regard to this.