Foreclosure Versus A Short Sale
What Are Short Sales?
Benefits Of A Foreclosure Versus A Short Sale; Short Sale Homes
The real estate and banking collapse of 2008 has devasted millions of home owners throughout the country where housing values have plummetted and wiped out equties of homeowners. Millions of hard working Americans who have lost their jobs could no long afford their monthly mortgage payments and were forced to list their homes so they can downsize or take the hard earned equities they have build. Unfortunately, the majority of the homeowners found out that the mortgage balance of their homes were higher than the value of their homes and were forced to contact their banks or mortgage lender and offer them the keys in lieu of a foreclosure and/or short sale. Many did not know what the advantages and disadvantages of a foreclosure versus a short sale.
How Do Short Sales Work?
Hiring A Real Estate Agent
Advantages And Disadvantages Of Buying A Foreclosure Versus A Short Sale
On most cases, the buying process of a short sale home is takes normally longer than a foreclosure home. Banks or mortgage lenders owns the the home on foreclosed home and has the liabilities of all existing liens that is attached to the subject property. Bearing this fact, the buying process is shortened because the bank or mortgage lender has full control of the property and in most cases, the home is vacant. Prices for foreclosed homes may be lower than short sale homes because mortgage lenders do not want to hold vacant property in its inventory and do not want the liability of vandalism or having squatters occupy the place as well as keeping up with the maintenance of the property. The longer a foreclosed home sits on the market, the better price advantage and negotiation power you will have. The bad thing about foreclosed homes is that most foreclosed homes are in worst condition than short sale homes. With short sale homes, the homeowner can be still occupying the home and taking care of the home. Many times, foreclosed homes have had fixtures and appliances taken out of the home or replaced with inferior items. Keep in mind that most short sale homes and foreclosed homes are sold on an “AS IS” basis and you could run into problems during the appraisal process. Sellers normally correct items that the appraiser requires fixed but many banks or mortgage lenders who are the owners of short sale homes or foreclosed homes may be relunctant in repairing items when the appraisal requires it. Some banks or mortgage lenders will give the buyers entry to the property to make the repairs but will not pay for it.
Disadvantages Of Buying A Foreclosure Or Short Sale Home
Not all foreclosures or short sale homes are bargains. Many times market prices for foreclosure and short sale homes are at market or above market prices and that is why I strongly recommend that you choose an experienced realtor who knows the area and the comparables. Another disadvantage in buying foreclosed homes or short sale homes is that they normally take a lot longer to close than privately listed homes. There are cases where foreclosed homes and short sale homes take up to six months to close due to the slowness of the mortgage lender or bank to get back with conditions such as title, lien releases, etc.