3 Biggest Pitfalls to be aware of when looking at Short Sale Properties in Boise!
by Kevin Hughes
on Tuesday, July 22nd, 2014 at 5:01pm.
"Short Sale" homes are everywhere in Boise and can be a great deal. However, there are some red flags that every buyer should be aware of before taking the plunge on writing a short sale offer on Idaho real estate.
There is more than one lender on the property. If there is a different lender on the first and second mortgage or home equity line of credit (or even on a third), it complicates the approval process because all parties must agree to the terms of short sale. Typically, the second will want to negotiate to get something and this will usually be paid by the first just to get them to agree. The lien holder may ask the seller to sign a promissory note at closing to pay the difference from the proceeds of the sale and the amount owed. If not all parties can agree, then the home will go to foreclosure and derail the short sale process. The second may still have recourse after foreclosure if they can go after the seller with a deficiency judgment to pay the difference owed.
The agent listing the home has never listed a short sale property. Short sales are difficult even under the best of circumstances and demand attention throughout the entire process. If the listing agent does not have any prior experience working with short sales, then they may not know exactly how to get the bank to approve it and who they need to talk to. This is crucial because of the time restraints of the trustee sale and the ever-changing approval process.
The seller is declaring bankruptcy. If the seller decides to declare bankruptcy then the short sale process is suspended until the outcome of the bankruptcy ruling. This could take up to a year and it may not ever end up on the market or will be eventually be a foreclosure. Your best bet as a buyer is to ask if this is a possibility and if it is, then find a different property to purchase.
Short sales in Idaho make up a significant portion of all the current sales in the real estate market. It is important that before thinking of going forward with an offer on a short sale, a buyer does their homework on the property and watches out for these common pitfalls that can slow down or derail the sale on Boise short sale properties.