The “Short Sale”

The term short sale refers to real estate that is put on the market by a seller, but is still technically bank owned. This occurs when the seller owes their bank more money than the home will sell for – the home is literally selling short of the price necessary to pay off the home’s mortgage, meaning the bank loses a certain amount of money once the home is sold. In this kind of situation, the seller acts as the legal homeowner throughout the process of the home sale, but once an offer is made on the home, the offer will need to be approved by the seller’s bank.
Short sales are very common in the marketplace. Currently, every 1 in 3 sales in Thurston County is a short sale or a foreclosed property – meaning, bank owned. Most short sales take longer than 120 days to close. The seller’s bank will review the offer, have the seller provide a letter of hardship, provide all current financials, and, in some cases, be responsible for repaying the difference that comes up short for the bank. In the instance of short sales, it’s important to be careful and to have a good agent, because there are no guarantees that the home will sell.

“As-Is” Home Sales

The term As-Is means the home is sold without any repairs made from the seller (which in this case is usually a bank). This means that after home inspections, if the buyer wants any part of the home changed or repaired, they have to be willing to make those changes themselves. Banks started using the term As-Is so they could sell homes without having to worry about making changes to the homes – which is fair, since they have never lived in the home.

The term may seem intimidating, but most homes are fairly well-built. While some builders will spare no expense to use top-of-the-line products, it is also true that some builders will use lower end products in homes. Most contemporary homes are typically built with “2 by 6” construction and there are building codes requiring that homes be built well.  Also, the home inspection period gives the buyer plenty of time to investigate the home. If the home is not in adequate condition, or it costs too much money, the buyer has every right to terminate their contract. If there is a concern about the structure of the home, or if it is deemed unsafe in any way, a bank will typically make a concession. A bank is usually willing to make a concession because they understand that if they don’t, they are stuck with the defect and the home. As-is home sales should not be a reason to scare buyers away from a home that has everything they are looking for. As long as the buyers look into the home and have a good inspection, the home should be a great buy.

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