Understanding Short Sale Houses
When it comes to finding short sale houses for sale, the landscape can be quite different from what you might be accustomed to. Short sales occur when a homeowner is unable to pay their mortgage, but the property is not in foreclosure. Instead, the bank agrees to accept less than the full amount due on the mortgage to avoid the more extensive process and financial loss associated with a foreclosure. Here’s a comprehensive guide to help you navigate the process and find the right short sale house for your needs.
Why are Short Sales Rare in Some Areas?
While short sales were once a common occurrence, in today's market, you might find very few - if any - short sale houses for sale in your area. This is often due to rapid appreciation in property values. As prices have soared, many homeowners have gained substantial equity, making short sales less necessary. However, with the right approach, it is still possible to find these unique properties.
Effective Search Strategies
Contact a Realtor
The easiest way to find short sale houses, especially if you have limited experience with this type of property, is to work with a real estate agent. Realtors have access to the multiple listing service (MLS) and can search for short sales on your behalf. You can either find a buyer's agent for this task or do the research yourself, but keep in mind that the MLS requires membership. Speaking to local newspapers or contacting a local realtor who knows the town's real estate landscape can also provide valuable information.
Online and Local Resources
Several resources can help you find short sale houses online and in your local community:
Online Searches: Use Google to search for short sale houses in your city or town (e.g., "short sale houses in [City], [State]"). This can help you get a sense of the availability and average prices in your area.Local Newspapers: Many foreclosures and short sales are listed before going online. Local newspapers can provide early updates and direct you to the right resources.Real Estate Agents: Contact real estate agents who specialize in REO (Real Estate Owned) properties, as they often have relationships with banks and can provide details on potential short sales.Contact Title Companies and Banks
To get a better understanding of when a short sale might become available, consider contacting title companies or reaching out to your bank's local branch manager. These professionals can provide information on when the Notice of Default (NOD) or Notice of Trustee Sale (NTS) was recorded, giving you an idea of how much time is left before an auction. This timing can be crucial in identifying opportunities.
Additional Tips for Homebuyers
For buyers with cash to purchase a home without needing a mortgage, another unconventional strategy can work well. You can examine bankruptcy filings in your area and cross-reference them with property records. Once you identify potential homeowners filing for bankruptcy, approach them through your real estate agent with a proposition to purchase their home for cash. This can also help the distressed seller avoid a foreclosure and possibly provide them with immediate tenancy.
Conclusion
While finding short sale houses can be challenging, especially in areas where property values have surged, there are various strategies and resources available to you. Utilizing a real estate agent, conducting online searches, and reaching out to local resources can all help you identify these unique opportunities. If you have the financial flexibility to purchase a house outright, exploring distressed properties can offer both a solution for the buyer and a chance to help the seller.
Whether you're a seasoned real estate investor or a first-time homebuyer, the key to success is thorough research and staying informed about market conditions. Short sale houses offer unique buying opportunities and can save both time and money in the long run.