Daily Question is excerpted from the JustAnswer archives and features information provided from an expert on JustAnswer.
Q: I am thinking of buying a home on a short sale. What are some of the things I should consider before buying (e.g. tax and legal issues)?
"Short sale" has nothing to do with the time to get to closing.
A: Short sales can be good ways to get a home for a good price. Here are four things to consider and watch out for:
1. Avoid homes with more than one loan (other than first mortgage) or any lien on the property. Properties with more than one mortgage or lien will have to have the permission of all lien holders before a short sale can go through.
2. Be prepared for a 3- to 6-month purchase process. Yes, it usually takes that long to get to closing. So if you are financing the loan, a short sale may not be for you.
3. Be sure to inquire whether the property taxes are up to date. If not, you will be expected to pay them when the house is yours.
4. Consider forgetting any potential property that is more than about 10% underwater. Few lenders will approve a loss great than that and will generally foreclose and hold the property for sale themselves.
– Answer provided by Doug C., real estate lawyer and expert on JustAnswer.
See also: Consequences of Walking Away from a Mortgage
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