Buying a home that is a short sale may be a very attractive option financially, but is often a case of "buyer beware." The home may be gotten at a steal, with prior owners selling the property for less that they owe. This must have been done with the lender's approval but was likely the best of a series of unsavory options and could mean the prior inhabitants didn't leave on their terms.
When a short sale home comes onto your radar during the home buying process, it is important to maintain a sound financial frame of mind and consider the home as an investment. While the home may have an attractive price tag and may be precisely what you are looking for, be sure to peel back the layers and cover as many bases as you can.
Get a home inspection and investigate the cost of issues and their repair. Determine how much money it will take to restore the home to a habitable state. Is the cost still attractive?
Could you rent the home out for the amount your mortgage payment would be? If you couldn't get back in rent what you pay on the mortgage, would it still be a sound investment that you could afford?
Finally, if you saw a considerable decrease in the appraised value of the property, would it still look like an attractive investment at the short sale price?
Often short sales exist due to a considerable loss of value in an existing residential property. If you are considering a short sale property, it is important to understand the process and the reasons behind a short sale, as well as knowing what red flags could stop the sale in its tracks. A Florida real estate attorney may be able to advise you throughout the process and help ensure your decision is financially sound.