We buy houses in San Juan Capistrano California. As homebuyers in CA, it certainly sounds like a good deal to buy a house on a short sale basis, especially for investors. Also, it is an opportunity to purchase a property well below its normal valuation.
You need to be aware of the drawbacks of buying a short sale in San Juan Capistrano before jumping in.
4 Disadvantages Of Buying A Short Sale In San Juan Capistrano CA
Depends On Mortgage Lender’s Approval In CA
Usually, a short sale involves selling a house for less than it is owed. An individual still owns a home listed as a “short sale” (as opposed to a foreclosure case). Either that person makes the difference between the amount owed and the selling price, or he gets the lender to write off.
What that means, though, is it’s not the seller who approves the selling price–it’s the borrower. And as the seller is trying to get the creditor to pay less than the property owes, the borrower is not always eager to accept the proposed rates. You could go through the entire process of headache-inducing negotiations only to eventually have your bid refused by the borrower. And then you would have to do it all over again.
However, if there are ties to the land, you would have to get more than one borrower to agree to the selling price.
Pricing Problems In Your California Property
Similar to our first downside to buying a short sale in San Juan Capistrano is the fact that the advertised short selling price may not be an approved borrower price at all. The advertised price is often only a trick to get potential buyers on the line.
If your bid of the advertised price is not approved by the borrower, they can send you a counteroffer. But it may be more than you’re willing to pay for the property, and you’re getting out again a lot of wasted time. Again, if the property has multiple links and even if the first lien holders accept your offer from the advertised price, your offer may be rejected by a lien holder further down the line.
Lengthy Process Of A Short Sale In CA
When you want to buy a property quickly, the best choice is definitely not a short sale. It sometimes takes up to one year to complete a short sale. And of all the drawbacks of buying a short sale in San Juan Capistrano, it could be the most off-putting for investors.
You’ll need a lot of patience when you purchase a short sale. While a lender’s response usually takes at least a few months, in some cases it may (and does) take nine months or longer. Other factors involved in extending the process are the experience of the lender with short sales, the number of lenders involved, and whether the seller was actually approved for short sales.
As a result, borrowers will miss out on low-interest loans with fixed rates for just 60 to 90 days. During this extended waiting period, buyers could also lose tax credits.
“As-Is” Sale In San Juan Capistrano
Generally speaking, sellers who want to negotiate a short sale suffer some sort of financial distress or hardship. So it’s very likely the case that they don’t have and didn’t have the money to hold the property properly. And because the borrower is losing money on the sale already, they will not make any compensation for maintenance issues. That’s why most short sales are made on an as-is basis.
So if you’re considering buying a short sale, you need to be mindful that for thorough inspections you may need to put out some significant cash. And, maybe for repairs a lot more.
Sell My House In San Juan Capistrano CA
It’s not always as straightforward as it seems to purchase an investment property, and an offer isn’t always as good as it appears on the surface. If you think you need to sell your house in CA to purchase a short sale, call Premier Property Buyers. We are your local California home buyers who offer cash for houses in Capistrano and we can help you.