Should You Consider Pasco Properties for Short Sale?
April 20, 2010
Author: admin (72 Articles)
Short sale Pasco properties often come with a “great bargain” tag price. However, buying them may not be such a good idea. In fact, there are Pasco realtors who would talk their clients out of buying these kinds of properties. Admittedly, many agents will not talk you out of it. But what are the reasons why you should not consider short sale homes?
What are short sales to begin with?
Short sale homes for sale in Pasco are actually owned by sellers who defaulted in their mortgage payments. The lenders are forced to accept an amount less than the existing loan.
On the surface, short sales are seemingly great, but this is not the case. In fact, buyers are better off buying a property that is not encumbered by mortgages or loans. Most real estate agents, however, will not tell you this. After all, they tend to gain from these types of sale. In truth, everyone gains except the seller and the buyer, so if you really want to get a great bargain, you should avoid these properties.
Short sale properties are usually pre-foreclosure properties. Sometimes, listing agents encourage sellers to put these properties up for short sale. This usually works to their advantage because they will not be able to win the listing if the Pasco property goes through foreclosure.
Here are a few reasons why buyers would avoid short sales:
- The seller has no equity. You, as a buyer, do not earn free equity from short sales. Usually, the seller has no equity, so he has no choice but to put up his property at a price which is less than his purchase price of the same property.
- The seller owes the bank an amount that is more than the value of the property. Sometimes, banks allow property owners to over-mortgage their home. As a result, the loan is bigger than the actual value of the property.
- The seller may not really qualify for short sale. Sometimes, in order to avoid foreclosure and with the insistence of an unethical Pasco realty agent, a home seller can put up his property for short sale despite the fact that he is not really qualified to do the same. Sellers need to prove financial hardship in order to qualify for short sale.
- The property sells at market value. Lenders know their figures and if they know that they can get more money out of foreclosure, they will definitely hold out for a bigger amount. They may put out the property for short sale, but the price may be considerably equal to its market value.
- Buyers end up paying for the “property as is”. This means that the buyer may end up paying for repairs, inspection, certifications, protection plans and deferred payments.
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