A new government program aimed to speed up these notoriously sluggish transactions goes into effect on April 5, increasing your chances of negotiating a distressed-property bargain.
Q: I am looking to buy my first home, and it seems like short-sales are priced much lower than regular sales. Are these prices negotiable, or are they the bottom line that lenders will accept?
—Allentown, Pa.
A: Many lenders negotiate prices for short-sales, in which the seller is offering the home for less than is owed on the mortgage. But traditionally the only way you could find out was to submit a below-list offer and wait—often for many months—for a response. If the bank made a counter-offer, you knew you were in the ballpark; if they didn't respond at all, you were too low. By then, you may have lost all interest in buying the property.
The good news is, on April 5, this frustrating system will change at least for some buyers and sellers. That's when the federal government will begin to provide financial incentives to lenders to do more short sales. The rules also help standardize the process, so your chances of negotiating a distressed-property bargain will increase.
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