How to win during inspections when buying a short sale?
Short sale properties can provide savings like a home that is foreclosed, but with fewer risks. Home-owners who are selling their properties through this transaction can no longer make their monthly mortgage payments. Rather than having the bank foreclose the home, they negotiate with their lender to sell it for a price that is less than the outstanding amount of the loan. The bank recovers some of the debt, the seller sees less credit damage and you get to purchase a home at fair market value. If you’re a real estate investor, this could mean a sizeable profit. With hundreds of thousands of homes in foreclosure or on short sale lists, there’s never been a better time to score a sweet deal. Home inspection is the important part of short sale process that highly affects the price of a short sale. Home inspection is a great help for a buyer to make buying decision. A home inspector always tries to find the risks that can bring the price of a short sale lower. Local governments in many states put a requirement for home inspection where the buyers are provided with details home inspection. It is best to be getting ready for a thorough home inspection, whether you’re producing a seller’s home inspection for the buyer or your home is going to be inspected by the buyer’s home inspector.
There are a number of factors that you should consider while getting ready for home inspection. Some of the best ways for getting ready for home inspection are given here:
1. Ask for Seller Concessions from Day 1:-
When you initially turned towards your purchase contract with the help of the Listing Agent, once they gathered the rest of what they needed e.g., HUD, Proof of funds or Prequalification and turned it in, then officially the short sale process get started. This is also the first opportunity to add a cushion for later on. Ask the title officer who is preparing the HUD for your contract to add on Seller Concessions, starting with 3%. Even if you are paying cash, ask anyway, since if you are using hard money you could have fees, etc. that are on the Buyers side of the HUD. If you’re financed, it makes even more sense to add them on. The worst they can say is “No!” and make them be removed at a later date.2. Provide an
2. Inspection Report Summary & Repair Cost Estimate:-
The inspection period will not formally start until an Approval is issued. To that regard, comparing this to a traditional sale, there is no difference of what you are allowed to negotiate during inspections while you are buying a short sale. To that affect though, you’re not reasoning with a person who is more aware of the condition of the home to concede. In essence, you’re convincing an automaton to plug in lower numbers into their conclusion to accept a lower value, plain and simple. With that, make it simple for them by including a concise breakdown of what’s wrong with the property, how much it will take to fix it, formalized by local professionals via an inspection report summary and professional cost repair estimate. It’s noteworthy that even if the house is being purchased in as it is condition; you still have every right to negotiate on repairs. You’re not asking them to fix anything, simply to lower the price. Even in a normal transaction, as it does not negate the buyer’s ability to ask for any sort of concessions. We can’t control the powers that be ultimately decide if accepting your short sale is better for their bottom line or not. If you are out making offers though, understanding the short sale process and learning to try to work it to your advantage is crucial, much like any other acquisition method.
3. Be On Time For Home Inspection:-
The time is really an important factor of home inspection. Sometimes the home inspectors set an appointment for home inspection early. If an inspector makes an appointment with you for 9:00am it is better to have the house ready for inspection at 8:30. Some of the homes inspectors may start with exterior so it is better to leave the shades down or draped drawn until you are dressed.
4. Leave the Utilities Connected:-
The homeowners are advised to leave the utilities contacted because the inspectors will try to turn on the utilities including stove, dishwasher, furnace and air conditioner. It is more important if the home has been vacant. It’s really difficult to inspect receptacles for grounding and reverse polarity if the power is turned off. Without utilities, the inspector will have to reschedule, which could delay the closing of your transaction and the removal of the buyer’s home inspection contingency.
5. Be Away From Home:-
Sometimes the buyers would love to come with home inspectors because they are interested to see the things personally. Presence of homeowner may restrict the buyers to ask more questions about the home and other elements. It is better to plan a time for home inspection when you can be out of house with your children.