Philadelphia PA short sales are not quite the same as a typical home sale. Before looking at or buying a short sale in Philadelphia PA, it is critical that you understand what they are and what the process involves. Below is some general guidance on buying Philadelphia PA short sale homes.
Definition of a Short Sale
A short sale refers to homes where the amount of the sale will not be sufficient for what the property owner would need at closing, and the Philadelphia PA seller has no other assets to cover the shortage. This can include the mortgage(s) on the home, real estate fees, closing fees, and other related fees. The lienholders on the Philadelphia PA property would be “shorted” what is due/owed to them, which is where the term “short” sale comes from. Homes listed as short sales do not guarantee that they can actually be sold. The mortgage companies currently maintaining the liens on the home must all authorize the short sale in order for it to go through. This is where it can get complicated. Sellers must submit their financial and personal information, explanation of hardship, and an offer from a home buyer to get approval from the lenders, and if there are multiple, all of them must approve.
Pros of Short Sales
There are many short sales offered for sale in Philadelphia PA due to the current real estate market, providing potential buyers with many alternatives. Also, short sales are frequently an opportunity for buyers to get a reduced price on homes. However, short sales do not fit the needs of all Philadelphia PA prospective buyers.
Disadvantages of Short Sales
Short Sale Timing
Philadelphia PA potential buyers must move forward with an offer without knowing whether it will actually be approved. It can also take a really long time to receive word of the approval status (typically several months or even up to a year). Buyers needing to close within a short period of time should not consider short sales.
Repair Required for Short Sales
Short sale homes can often require a lot of repair and are sold without any concessions for problems since the owner has insufficient funds and the lienholders are already taking a loss. Buyers of Philadelphia PA short sales should be prepared to complete repairs after closing on the home.
Buying Philadelphia PA Short Sale Homes
Short sale homes are not for everyone, and home buyers should be aware of the benefits and risks before considering or making an offer on a short sale. For potential buyers with non-specific time frames and the ability to make repairs on their own, it can be a great opportunity to get a reduced price on a home. Consult with your Realtor for additional information on buying Philadelphia PA short sale homes in your area.