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Tuesday, December 18, 2012

As real estate markets improve, are short sales riskier?

Short sales have always involved risk.  Risk for the buyer the lender will not approve the offer.  Risk for the buyer the seller will not accept the lender's terms for approval (deficiency issues).  Risk that, if approved by all parties, the appraisal will come in low.

Short sales involve multiple opportunities for failure.

It is because of that probability the offer price on short sales is usually much lower than market value.

So it makes sense to expect a discounted price, right?

But as the market slowly recovers what happens if 3-6 months down the road your offer price is rejected because the new "comps" show an improved market?

In a declining market, the buyer faced the risk of a loss in a long drawn out short sale process.  But the times are changing.

Short sale buyers should anticipate the potential hurdles when making their offer.  Sometimes the best option is to forgo the short sale route and buy a fair market property.

If you are considering the buying or selling a short sale in Brevard County, Florida, give me a call at 321-693-3850 if I can help in any way.

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