I often hear from many home buyers in the Metro Detroit and Novi Real Estate Market that short sales are one of the best buys in the real estate market. This statement is not always true and here are a two of the biggest myths busted about short sales and why these types of homes are not always a “best buy”.
- Just because a home is listed as a short sale, this does not guarantee the bank will allow this to happen: No matter what the home is listed for sale at, if the seller cannot provide a documented and verifiable financial hardship, the bank will not grant a short sale and will not allow this transaction to be completed. Many home buyers don’t realize this and before a home buyer enters into a purchase agreement and potentially gets stuck in a purchase agreement for several months, it is very important to find out if there is a true hardship.
- Banks will agree to any offer submitted on a short sale: Before a bank just blindly accepts any offer on a short sale, the bank will have an abbreviated version of an appraisal done to verify that the offer price is relative to market value of comparable homes. This home evaluation the bank does is known as a BPO, (Broker Price Opinion.) If the home value of the BPO comes in at above the offer to purchase, the bank will often come back and counter the offer submitted.
There is so much more to short sales but these are just two of the biggest myths.