How emotion controls the business during the short sale
Short sale homes come with different advantages. First of all, it’s an excellent option for the new buyers who want to buy their own property but cannot afford it. Second, it’s known as a sound investment. People sometimes flip the property. After that, they resell the same property at a significant market to make money in a short period. Apart from that, it also works as an extra source of income. They simply rent it out and make some extra cash. All these reasons make short sale properties an excellent investment. That is why nowadays people prefer to buy it. But you need be careful before buying it. Why? Let’s take a look.
You have to be careful before buying these properties
Short sale homes create excellent financial opportunities. But investors should trade them lightly because sometimes sellers have emotional bonding with these properties. So to avoid various tense situations, you need to be a bit careful. Try to remain neutral to avoid these delicate situations. Otherwise, it will be difficult for you to extricate yourself from it.
Don’t try to be a Superhero
People always try to get rid of a tensed situation. This is common human nature. To get rid of these problems they start finding out different solutions. For example, if a seller is planning for short sale for his or her property, he or she may be giving the property in the hand of a tenant who will occupy it when the deal is over. Have you ever thought why not the current owner of the home? It may seem to you a logical solution, but at the same time, this solution can lead you to a path where you may have to face allegations of fraudulent activities.
You need to keep in mind that these properties come with a lot of emotional attachments, and people take haphazard decisions in their highly emotional state. This emotional state encourages people not to sell the property even when they really need to sell it for some financial reasons. So, before buying properties of short sales, you need to be very careful. Otherwise, you may end up buying some emotional troubles instead of buying a valuable property.
Why the short sale price becomes too low sometimes?
There are many instances where sellers complain that they are not getting the expected price at the time of short selling. Though, their homes are lovely without any complexities. It happens because of the same thing. Sellers have strong emotional attachments to their property. That is why they sometimes feel that they are not getting the actual price. Here, you need to keep in mind a few things. In this whole process of short selling, the seller will not receive any money. The exception happens if the seller has any tax liability concerns. In that case, the lower selling price means a higher tax liability and also a great mortgage relief. Apart from that, the price doesn’t matter to the seller. Here comes another crucial factor, if the lender will accept the offered price or not. The homeowners sometimes get surprised to know that even lenders get money for short sales.
Get some more crucial information about the short sale properties
• The buyers place some funds in the escrow. The real estate commission gets paid from that fund only.
• No equity is available in the house, so the lender pays the entire commission.
• The essential documents required at the time of short sale are the hardship statement, tax returns, statement of income, the purchase agreement as well as the listing agreement and the appraisal.
• The authorization of the borrower is very important. The lender can speak to the representative about the loan if he or she has this permission. This authorization is vital as each mortgage needs it. Along with that, this authorization is essential for each Attorney too so that they can act on your behalf.
At the time of short sale don’t be too picky. Remember, there is no such term called “Perfect buyer.” Don’t let your emotions control you all the time. You have to make a conscious effort. Otherwise, you will never be able to make a sound business decision.