Friday, April 22, 2011

The Skinny on Short Sales

Short sales.  Shudder.  Coming into this process we knew nothing about what a short sale actually is except that we heard repeatedly that we should avoid them.  Short sales, however, are becoming our best friends in this process. 

The thing about short sales is that you can't be in a big rush (we're not), you can't be too married to a particular house (we're not), and you have to be prepared to make some repairs (we are).  Short sales (you know this if you watched the video above) are when the seller owes more on the house then the house is worth.  To avoid going into foreclosure, the sellers attempt to get the bank to allow them to sell the house for less then they owe.  The problem with short sales is that even if the seller is eager to hand over the house, the bank needs to approve the offer.  This can take months and may not happen at all.

Short sales are ideal for us because we are trying to get a house in a low price range for Portland, we have cash available to cover upfront repairs that the seller won't be able to afford to make, and we're not really in any rush.  Because you never know how long a short sale will take to go through, if ever, the plan is to put in offers on as many short sales as we think we might like and just wait and see which ones pan out.  The waiting will give us plenty of time to keep looking at more houses and if we find something that we like that's not a short sale in the meantime and end up there then so be it. 

More on our house hunt soon, but if you want to read a little more about short sales check out this article at Fearless Home Buyer.

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