As potential Chicago home buyers, you are probably familiar with what a typical sale looks like. You probably also have a basic understanding of what a foreclosure is and how it works. Another type of sale that may be less understood is called a short sale.
These sales are not as popular in the market, but you may come across a few. You may even fall in love with a home that is listed as a short sale. What does this mean for you as the Chicago home buyers? These are the basic facts that you need to know about these homes and the process for purchase.
What Is A Short Sale?
A short sale is negotiated when the lender for the current homeowner’s mortgage agrees to list the house for a smaller mortgage payoff amount. This means that they will be taking in less money than what is owed on the property in order for it to sell quickly on the market.
This usually happens when the current owner of the property, the seller, is in a distressed financial state. There are many reasons why a seller may have lost the ability to pay their mortgage, such as losing income or unexpected expenses. Maybe the owners are going through a complicated divorce and need to unload the property. Regardless of the reason, the lender has an incentive to remedy this situation.
How Does It Work For The Chicago Home Buyers?
What future Chicago home buyers should know when it comes to purchasing a short sale property, the process is not much different than purchasing any other home on the market. The lender will want to make sure that you will be able to complete the purchase, especially under these circumstances, so you will likely need to be preapproved or prequalified before your offer can be accepted.
One major difference is that the process is typically more drawn out than if you were making a traditional home purchase. Even though it is called a short sale, it is not something that happens very quickly. In fact, it can take an average of 2 to 4 months for a short sale to be approved and for the actual closing to take place.
Now that you understand the basics of a short sale and how it works, you can decide if it is something that may fit into your criteria and timeline. If so, and you do find a home you love, you should not let something like a short sale stop you from getting it. Your real estate agent can help navigate you through the process to make it as simple as possible.