Which is Better? Buying a Short Sale vs. Foreclosure

Looking for a great deal?  There are a number of wonderful opportunities in the real estate market nowadays, and if you are willing to put in some work, consider buying a distressed property. That is, either a  short sale or foreclosed home.

But which type is best for you?

First, a "short sale" is when the homeowner owes more than the home is  worth, and the listing price is set based on the comparable sales in the neighborhood. 

The offer to purchase is made to the owner, although the final decision to accept a purchase contract must be made by the bank (or banks) that hold the mortgage(s).  

The short sale process can be  somewhat unpredictable because it depends on the responsiveness of the mortgage holder.  It is difficult to predict how long it will be before the short sale is either approved or rejected, and as a note, these homes are usually sold "as-is".

If you have flexibility about when you need to move and are willing to wait out the process a short sale may be a great option.  However, if you need to move quickly a foreclosure may be a better choice.

Different from a Foreclosed Home.

The bank already owns a foreclosed home.  The listing price has been set by the bannk's asset manager. The acceptance of an offer on a foreclosed home is usually a much shorter process than on a short sale, and most foreclosures are as-is sales as well.

First of all, if title insurance is available on the foreclosed home, then most financial experts agree that it is safe to buy. (Check with your attorney)  That way, you are protected from the former owner coming back to seize the home back, it is was wrongfully foreclosed.  

Bank foreclosures are also called REO properties (real-estate owned by a bank).  Finding an REO property follows the simple common sense rule as everything else in life – buyer beware. Many of these homes fell into foreclosure months before they come on to the market, and many of them have fallen into further disrepair. Another caveat- Once a home has been empty for months, it can fall into such a bad condition that it no longer qualifies for a mortgage. Cash would be king, if this were the case.

Either a short sale or a foreclosed home can be an amazing deal for the right purchaser.  When looking at either short sales or foreclosure properties, make sure you do your homework first, and hire the right agent to represent you in your quest... and that would be me!

Buying or Selling a Home in Fairfield County? We'd love to represent you.

feel free to email us here or visit our main  site at

www.CThomesAndRealEstate.com

If you have a question about buying or selling Real Estate in  Fairfield County, and are in need of representation, I invite you to contact me. I know the market like the back of my hand, know marketing inside and out, am a skilled negotiator- and I'd love to be on your side :) - Judy

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