What buyers need to consider when purchasing a property in a short sale.
Short sales are commercial real estate transactions where the selling price of the property falls short of the total debts, second mortgages, or liens against the property. Short sales typically occur when a property owner is unable to pay their lender and wishes to get rid of the property to avoid bankruptcy. The lender agrees to accept less than the total loan amount in order to liquidate the property and receive some returns on it. As a buyer, short sales can offer a great opportunity to acquire property at a lower price. However, these transactions can be complicated, so it’s important that you watch out for common pitfalls. Your commercial realty advisors explain some of the positives and negatives associated with short sales.
- Pros of a Short Sale
Short sales are great when you can purchase a property at fair market value. Because short sales are a better alternative to having the property foreclosed, sellers are more likely to work with the buyer. The lender wishes to recoup some of their losses, so they are more likely to compromise to push the sale through.
- Cons of a Short Sale
As previously mentioned, short sales are complicated and can be difficult for a buyer to navigate on their own. It’s best to work with a seasoned real estate agent, so they can guide you through the process. During a short sale, the buyer may also have to assume of the closing costs that the seller is typically responsible for. Short sales also take longer, and it can be difficult to lock in a firm closing date. Finally, short sales often fall through, even when the lender approves the sale. This is because the seller may be unable to pay or refuse to pay an unsecured debt if the sale goes through.
These are some of the things to consider when buying through a short sale. Are you looking for more help from trusted commercial realty advisors? If so, then contact the experts at California Commercial Realty Advisors, Inc. Our dedicated team is eager to assist you today.