Foreclosures and Short Sales

Thinking of a foreclosure or short sale...Here is some info anyone can understand.

In a nutshell Foreclosure is the legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the home. In most cases it is very important to have your pre approval letter up front because the banks won't even waste their time looking at your offer if you don't. There often is little, if any, room for negotiation. All though a good agent can sometimes get the bank to negotiate ;-) Many times the home is in bad shape as it has been vacant for awhile, not always though. A positive note to buying a foreclosure is that they are vacant most of the time and that can speed up the time for closing and you moving in!! If you tend to get emotional about home buying a home then a foreclosure may not be right for you as you may have to write a dozen offers before you get one accepted. So don't set your hopes to high on a specific home. Remember, many investors are looking at the same homes you are in hopes of getting a good great deal. Be ready for the Grind. It is not uncommon for a good foreclosure to have multiple offers on it in just a few days. I wrote an offer on one not long ago and in the 1st 3 days it had 13 offers..Ended up selling for OVER asking price.

Short Sale is the sale of a property that sells for less than the balance owing on its mortgage.If there is a mortgage balance that is greater than the market value of the home, that property is a short sale. EX: a homeowner is in distress and can not make payments. Put home up for sale for less than they owe on it. Get an offer, submit offer to the bank. If bank approves price the buyer may purchase for said price. Very often it is cheaper for bank to sell as a short sale than go through the foreclosure process.

I'll be the 1st one to tell you that a Short Sale is a giant pain in the butt most of the time. You must 1st write your offer and submit it to the seller, the seller then accepts (hopefully) and then it gets sent to the bank where they take their sweet sweet time. It gets sent to a bazillion different departments, maybe it gets lost, maybe it doesn't, who knows!! The bank may very well tell you in 3 months that the offer was declined and you have to start over from the beginning. BUT, if you have a good agent who is skilled or is smart enough to let a title company or law firm do the negotiating on there half it can be a beautiful thing. You may possibly end up with a deal of a lifetime. Typically after the sale price is approved by the bank the normal time frame for a sale applies One of the best parts about a short sale vs foreclosure is that most of the time the home is in much better shape because it had someone in it that wanted it to show well so it could be sold. If you have any questions about short sales I have negotiated them from one end to the other and I have also referred them out. Feel free to ask anything and If you think a short sale may be in your future let me know!!