When you’re looking at Ellicott City homes for sale, you’ll probably run into a few listed as short sales.
But what is a short sale, and should you buy one?
What is a Short Sale?
A short sale is a sale that occurs when a homeowner owes more on a home than it’s worth. Usually, owners don’t attempt a short sale unless they owe the bank money for monthly mortgage payments that they can’t make.
Let’s say the homeowner wants to sell the house for $250,000, but still owes the lender $275,000. The seller is asking the lender if he or she can “short” the bank the full amount just to get out from under the payments.
The lender has to get the bank’s approval to do this. If the lender accepts the term, it will consider the homeowner’s debt paid once the home sells to another buyer.
A short sale is often the step before foreclosure.
Related: What is foreclosure?
Should You Buy a Short Sale?
For some buyers, a short sale is a great way to save some cash. It might enable you to buy a house that you couldn’t otherwise afford – they’re cheaper because really, what the bank wants to do is prevent further losses.
However, if you’re thinking about buying a short sale, here’s what you need to know:
- Short sales can take a long time to close
- Short sales are often sold as-is
- Short sales may be in poor condition
Short Sales Can Take a Long Time to Close
Because there are so many hoops to jump through, a short sale can take several months to close.
Short Sales Are Sold As-Is
Usually, short sale properties are sold as-is. That means you can’t negotiate to get things fixed or upgraded in the buying process.
Short Sales May Be in Poor Condition
The reason the seller is using a short sale is that he or she can’t afford monthly mortgage payments – and that may mean that the seller has let maintenance and upkeep fall by the wayside in an effort to save money.
Are You Buying a Home in Ellicott City?
If you’re ready to buy a home for sale in Ellicott City, we can help you find the right one.
Call us at 410-465-5822 to tell us what you want from your next home or to schedule a tour in a home you’ve seen online.
Use these links to check out the hottest listings:
- Ellicott City homes for sale
- Columbia homes for sale
- Catonsville homes for sale
- Pikesville homes for sale
- Owings Mills homes for sale