short sale home for first time buyer?

Question by Argentinito: short sale home for first time buyer?
I am 24, single, make decent money… I’m in no hurry to get a home, but I think I need to take advantage of my situation.
Any recomendation? I heard short sales are the best and there are many in South Bay, San Diego County.

Best answer:

Answer by wartz
A short sale means that the seller owes more on his mortgage than the sale will generate so the lender takes it in the shorts. If the buyer is paying the current fair market price for the property it doesn’t help him one way or another.

What do you think? Answer below!

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4 Comments → “short sale home for first time buyer?”

  1. Thomas2Sell, Realtor

    Aug 21, 2012

    Good thing about a short sale is that you can make a ridiculous offer and the lender will most likely accept because they know they can go after the previous owner for the balance. That equals instant equity for you.

  2. Brent

    Aug 21, 2012


    Checkout for some valuable tips on buying a short sale home. Good luck.

  3. Pure Genius

    Aug 21, 2012

    its not a bad idea to get a short sale home, you can usually get one for a good price and they will probably negotiate with you… be careful not all short sale homes are nice and some require a lot of work.. may spend more money fixing it up but it can also be a good investment..found some great home buying advice hope it helps, good luck

  4. JT

    Aug 21, 2012

    I live in San Diego as well. While there are quite a few shorts sale and foreclosures in the South Bay, especially Eastlake and Otay Ranch, I’m not sure it is a good time to buy yet. I think that a majority of buyers in that part of the County utilized adjustable rate – interest only type loans and the fallout from that hasn’t really even peaked yet. Large amounts of those loans are “resetting” (the interest rate bumps up dramatically) over the next 5-6 months. This will result in a lot more short sales and foreclosures.

    Since you are not in a hurry I would wait and see what happens with the market. It will be dead during the Holidays which is normal but, come Spring, if it is still slow and has not picked up I would wait until next Fall. By then we’ll be able to see the full extent of the mortgage crisis’ effect on the market.
    If it is substantial then we’ll also see even lower prices by next Fall. If the market picks up in Spring then you can always buy then. Prices won’t jump up so fast that you will not have a chance to buy. In fact it’s possible that prices will take years to get back to where they were.

    Short sales can be good opportunities but bank owned foreclosures are, in my opinion, the best. A short sale goes through the seller but has to be approved by the lender so it can take a substantial amount of time. A bank owned foreclosure or REO can be purchased directly from the lender and sometimes even financed on favorable terms by the lender themselves.

    Try to find out which real estate brokerages handle foreclosures in South Bay and have them send you lists occasionally. I know Excel Properties, Oak Tree Realty and San Diego REO handle many lenders properties in San Diego but there are probably more that work in South Bay also. Keep an eye on values so that you know a good deal when you see one. Just because a property is listed as a short sale or foreclosure doesn’t mean it is automatically a good deal. You need to know values yourself so you can make an educated judgment when the time arises.
    Good Luck!

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