Short Sales and Foreclosures
Best deals in town!
Not always the case. In fact for many home buyers the process involved with these types of purchases is not worth the headaches. While all transactions are different, knowing what to expect is very important.
Are they cheaper then homes that are not distressed?
Often times they are, but not by much. Chances are these seemingly good deals have many pitfalls. This is more often the case in foreclosures, where the homes condition may require the buyer to perform repairs which may end up eating up the "savings" by purchasing a foreclosed home. The process involved when buying a foreclosure typically takes much more time then a "typical" transaction. It may take anywhere from three to six months (sometimes longer) to close on this type of transaction. During this time the bank will consider other offers before accepting yours. So you may be waiting a long time to hear whether or not your offer has been accepted. If you are in no hurry to move and are not afraid of the repairs then a foreclosure may be right for you. Be prepared however, you are dealing with a bank and not a homeowner who may be relocating. The banks motivation and timelines are different.
Get the list
Get a hold of your local agent and ask them for a report of homes that match what you are looking for. We recommend looking at all options, but if you want you can have them narrow it down by short sales and foreclosures.
Short Sales
These typically take less time to close however can also have their fair share of potential pitfalls. A short sale is when the home owner can no longer afford the payments and the home is now worth less then what they paid. They are asking to the mortgage lender to take less then what is owed for the home. You will once again be negotiating with a bank, but this time things tend to move a little quicker since the home has not been foreclosed on yet. These are great opportunities to be able to purchase a home for a good price. Don't be mislead though, you should always look at what is on the market to compare what is a great deal, they are not always short sales or foreclosures. Often when a neighborhood has short sales or foreclosures on the market and a home owner who is not in these circumstances needs to sell they will have to compete with what is on the market. This means that there are plenty of homes which are not distressed that are also great deals. Keep your eyes open.
Want the inside track?
Many investors take short sales and foreclosures off the market as soon as they see a good deal. If you want to try to stay ahead of them, contact your local agent. Most of the time there are only several agents in the area that handle the majority of these types of properties. Ask your local agent to alert you to these types of properties before they are put on the market. In most cases these agents will know what properties will be put on the market as foreclosures.
