Looking for Deals in Foreclosures & Short Sales?

Lots of people are looking for deals right now. I’ve had many people inquire about short sales and foreclosures.  Can you get a good deal with these types of sales…short answer is sometimes.  The caveat is that they are not for everyone, you will need to make sure you understand the differences between them and see if it is a road you are financially able to travel.

Here is a summary of what you can expect with those type of transactions.

1) Foreclosures – actual foreclosures are auctioned on the courthouse steps and you will need to pay cash for these.

• Bank Owned Foreclosures – these are foreclosures that did not sell on the courthouse steps and are placed back on the market by the bank.  You can purchase these using a loan.

2) Short Sales – these are houses where people have missed a couple of payments and are in financial jeopardy.  You can also use a loan to purchase these.  Not always a bargain but worth a go.

• Caveats include:
  i. Extended period to close the transaction. Between 3-6 months.
  ii. Banks are slow to respond with an answer as to whether your offer is accepted or not
  iii. Bank may entertain multiple offers at one time.  This means you may have a long wait before you know whether your offer was actually accepted AND a very short time to have the property inspected prior to close.

3) Standard Seller Listing – often times you can get a better deal by working through an agent to purchase a home that is not in one of the above distressed property types.  The seller may be motivated to sell for a number of reasons that don’t have to do with his/her financials, i.e. job move, marital status, etc.

Now you have a basic understanding of what to expect when you are looking for that special deal.  If you have any questions give me a call and I’d be glad you give you more indepth information.