Lower property values have caused many sellers to become upside down on their Outer Banks residence. Top that off with a weak economy and many owners are having trouble making their mortgage payments and want to get out from under their property. Short sales are a large part of the market today. Knowing a few key facts may help you decide if you want to include short sales in your Outer Banks real estate search. Here are the top five facts about Outer Banks Short Sales:
Often they already have a contract on them. The local Multiple Listing Service has listing agents put their under contract short sales in an “under contact continue to show” status. Properties with this status are included in the data feeds that go out to all the web sites. This status can be a little misleading because a new buyer has to wait for the first offeror.
They are sold with no repairs being made. Most times short sales have not been maintained like a regular home. There is no money for repairs to be made so the buyer purchases the property in an “as is” condition. Of course the buyer can have a home inspection once they know the bank accepts their contract. If they don’t like what they find then the buyer can void the contract. If you are looking for a home with little or no immediate maintenance then short sales may not be for you.
It can take a long time to get an answer. Before the seller’s lender will approve a short sale there is likely to be a long waiting period. During this time the lender will check to make sure the seller can not bring money to closing, as well as make sure they are not underselling the property. This can take as little time as a month or as long as a year.
Many are attractively priced. Not every buyer wants to deal with the head aches of buying a short sale. Also, most lenders will not talk with a seller about a short sale until they have a contract on their house. Therefore, a common strategy sellers use to speed up the short sale process is to under price their property.
Don’t count on the rental income. Buying a vacation rental short sale right before or during the main vacation rental season can be a foolish thing to do. Often the seller has already spent the funds they have already received from the upcoming rental season. The buyer then may end up owning the property and not be getting the proceeds from those vacation rental tenants that paid before he owned the house.
Purchasing a short sale can be a tricky process. This is especially true in a resort real estate market. Contact an agent at Scott Team Realty to help you successfully negotiate through the pitfalls of purchasing vacation rental property.