Arizona Investment Properties – What you need to know about Short Sales
In the state of Arizona, current statistics indicate nearly 2 out of every 10 real estate transactions are short sales. They are as popular as ever with investors, and the U.S. government continues to push this type of sale, especially with the Treasury Department tweaking rules these last few days in an effort to curb foreclosures. However there are several pitfalls that investors need to pay mind of before they move forward on a particular piece of property.
1. Short sales are a tremendously slow process – We’ve seen competitive cash offers take longer than 6 months until a bank accepts.
2. Most short sale offers fail in going through – Short sale listing prices are hardly ever approved by the bank, the price is usually what an agent or seller came up with… and most cash-distressed sellers refuse to pay traditional seller costs such as termite inspections and closing costs.
3. Prepare yourself for extra out-of-pocket costs – Banks realize that you want the property, and typically will not assist in paying added costs. Accepted short sale offers rarely end up being the true cost of purchasing the property because of varying factors such as past due HOA dues, title liens and appraisal issues where home values are declining in the area.
4. The bank has all the power.
5. Repairs performed by banks are extraordinarily hard to get done with short sales. Often times repairs end up being performed by the buyer.
6. Zero to little room to negotiate a closing date… you must close on time, no if’s, and’s or but’s.
7. Short Sales revolve around a waiting process. If you are in a rush to purchase real estate, short sales are not for you.
Remember that no 2 investors carry the same situation, or have the same needs. Always do your diligence in reviewing your specific objectives with a qualified real estate investment expert. An advisor should always be able to help you understand the potential of opportunities, in order for you to meet your objectives.