Buying After a Short Sale

It is almost mind boggling to look at all the misinformation one can find online about selling a home in Sacramento as a short sale. Not only that, but some of the right information is received incorrectly by the recipient, which is a double whammy. Short sales are complicated. If one is going to consider doing a short sale, one should hire an expert, a Sacramento short sale agent who has closed 100s of them, and there aren’t very many of us around.

I routinely receive calls lately from sellers who want to buy a new home right away. The problem with that concept is it is very difficult to do because a seller has to fit very tight criteria. Generally speaking, the following statement is true: if a buyer can qualify to buy a new home, that buyer will not be considered as a short sale seller by the seller’s bank. Banks are not in the business of giving sellers a break. If your home is underwater, that is not enough of a reason to do a short sale. On top of this, banks typically must follow financial guidelines in which to grant a short sale, and most bank’s guidelines state a seller must have a financial hardship. If a seller has a financial hardship, banks generally don’t lend money to these types of sellers to buy a new home. However, the other side of the coin is it depends on the story, how it is presented to the short sale bank and what the hardship consists of.

Do you see the dilemma? Most people, when faced with dumping an underwater home or staying there and hoping it will someday turn back into the black, will choose doing a short sale. That’s because they can wait out the two years required by most lenders and then buy a new home that is almost identical to the home they sold.

You can’t predict the future with absolute accuracy. But one can compare the past. There are sellers who sold in 2009 and bought again in 2012. They were able to replace their previous home with a better home in a nicer neighborhood for less money than they sold at. Less money, even! It was cheaper to buy a new home. Prices are edging up a little bit in Sacramento but let’s face it, the market is still excellent. Prices are low and interest rates are low. It’s still worth it to short sale now and then buy again in 2 years.

Because who wants to watch a buyer move next door who bought that home for half of your mortgage? If a spouse is not on the mortgage, that spouse might qualify for a new home. Some seller’s parents qualify for a new home for the sellers. There are ways to work around this dilemma. Call a Sacramento short sale agent like Elizabeth Weintraub today at 916-233-6759.