What’s the Difference Between a Short & Traditional Sale?

 

Purchasing a home that’s a short sale is usually pretty similar to a traditional home sale; however, there are still key differences in how the process plays out.

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Today we’re answering a question from Allison, who replied to my inquiry about what topics or questions you’d like me to discuss. Allison asks, “Could you explain what happens if you purchase a home that’s a short sale?”

First off, what is a short sale? A short sale is when the home seller is selling their home for less than the actual loan amount and the bank agrees to assume the loss. Therefore, the decision maker in a short sale is the bank, and they are much more involved than they would be in a traditional sale.

The short sale process takes anywhere from four to six months. Once the bank approves a home to be sold as a short sale, the process of purchasing it is usually pretty similar to a traditional home sale. For example, you still have the pending inspection period, which allows you to cancel the transaction if the condition of the home.

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The purchasing process is usually similar to that of a traditional home sale.

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There are some key differences between a short sale and a traditional sale, though. With a short sale, sellers are going to be less likely to make any repairs, so buyers usually purchase the property in as-is condition. If the seller has already moved out, there may be more maintenance issues since the the house has been left empty. In my experience, the bank doesn’t get involved in making any repairs to the home, since the homeowner is still technically the owner.

The short sale process is complex, so when you interview an agent, be sure that you ask them how many short sales they’ve done from start to finish. I recommend choosing an agent that’s done at least 10. Our team has done more than 50 short sale transactions, so we would be more than happy to help you out in this regard.

A very special thanks to Allison for bringing this important topic to light. If you have any questions or are looking to buy or sell a home, please feel free to reach out to us. We’d be happy to help!