There has often been a taboo about purchasing a foreclosed or short sale home. The details of both are quite vast so I will merely provide a summary and we can discuss further during your Buyer’s Counseling session.
1. There are various foreclosures and opportunities to own a home that requires little or no repairs/updates.
If you are a fan of the Property Brothers, you have likely seen the good, the bad and the ugly. Which one you choose depends on your personal preference, access to trades people to complete the work, your ability to invest in the process, your timeline and let’s face it patience to see the project to the end.
2. These properties are offered mostly in AS IS condition and the Seller will not provide repairs.
3. Financing questions should be asked prior to acceptance to be sure they fit the property based on condition. Closing Cost & Pre-paids may or may not be provided by the Seller.
4. Response time of Seller – due to the high volume of properties, response times are significantly longer than when working with a traditional, consumer owned residence. Often within days and at worst weeks.
5. Earnest deposit – this may be higher in many cases as it strengthens offers.
As stated there are a lot of nuances to the process but by teaming up with a Real Estate Professional, you will be able to consider all types of properties and decide what is best for you!
Short Sales – by their very nature is an oxymoron statement. It is a contradiction as it is not a short process. In reality, the term simply means that the Bank is willing to CONSIDER taking less than what is owed on the note. I emphasize consider because the house has obviously fallen behind in payments and received late fees and penalties that can increase the amount owed so banks will typically consider any and all reasonable offers.
Additionally to just the amount, there is the factor of timing. If you have 3+ months to wait to close because you found an ideal deal then a short sale may be right for you. The key component is that the Real Estate Professional who has the property listed has established a relationship with the Bank and even more so if they have negotiated a pre-approved short sale. Simply put, they have already talked to the bank and have an approved amount to sell the property for and are now just marketing and looking for the new buyer. Otherwise, when you make an offer and they are starting from scratch it will significantly increase your time line. There is much more to discuss during your counseling session.
I have successfully negotiated short sales and been able to close within the initial 90 days. This is important to all parties. Short sales are nothing to shun or even feel overwhelmed by just simply turn to expert advice and you should be able to navigate well. Extenuating circumstances can arise such as uncooperative Sellers, loan/title issues, repairs, appraisals, etc. However that can happen in any transaction but if you go in with the end (homeownership) in mind, you can normally navigate through any obstacles that arise!