Understanding La Jolla Real Estate Transactions: Short Sales
Are you in the market for a new home in La Jolla, California? If so, you've probably heard of the term short sale. Whether you are a first time homebuyer, a seasoned real estate veteran or someone interested in a vacation property, you may want to consider purchasing a short sale.
The first question many prospective La Jolla homebuyers ask is "what is a short sale?" Simply stated, a short sale is a real estate transaction where the homeowner owes the lender more money than the property is worth. The lender will agree to accept less than the full amount of the outstanding loan so they do not have to later repossess the property in the future which can be both expensive and time consuming.
Short sales provide homeowners who have fallen behind on their mortgage payment with a solution which allows them to avoid bankruptcy or foreclosure. However, for prospective homebuyers, purchasing a short sale offers a greater benefit in terms of cost. Because the bank wants to attract buyers, the cost of short sale homes in La Jolla is often significantly less than comparables in the area. Homebuyers could save anywhere from a few thousand to hundreds of thousands when buying a short sale in La Jolla.
While cost is the standout benefits, prospective homebuyers also need to be cautious of the short sale process. When purchasing a short sale, the home is delivered in an "as is" state. Buyers can include clauses in their offers that allow them to back out if severe damage or problems are found, however the bank will not lower the price to account for any repairs. A second factor to keep in mind is time. Banks are notorious for waiting week, even months before responding to an offer on a short sale. Although no La Jolla real estate expert knows the exact cause for the delay from banks, it is important for buyers to be aware that they may have to play the waiting game.
Buyers will need to look at their own personal situation and weigh the advantages and disadvantages of purchasing a short sale before deciding to move forward. Although there is a price advantage, purchasing a home for any amount is a big decision and should be treated with caution.