When many people start looking for a new home, they wonder what they should choose and how much of an investment it will be. Although many people aren't quite sure about what their new home will look like, the fact of the matter is that there are many aspects to be mindful of when it comes to real estate. From paying attention to how much things cost to looking carefully at your options, it really pays to understand and apply a little wisdom before you break ground on a project. Check out these posts to find out great tips about real estate.
Do you think you've found a home that is just what you are looking for, but discovered that the home is foreclosed or a short sale? If so, you may wonder how this changes up the home buying process. Here are some things to know about buying a home in either situation
Foreclosed Homes Are Bank Owned Properties
A home that has been foreclosed means that the home is now owned by the mortgage lender. The previous owner was unable to make their mortgage payment, and they have been forced to give up the home. The bank is trying to sell the home to recuperate as much of their losses as possible.
Short Sales Are Resident Owned Properties
In a short sale situation, the person selling the house is the owner that resides at the property. However, the list price on the home is not enough to cover all financial obligations to the original mortgage lender. This can happen if real estate rates drop in the area, and someone purchased the home for much more than it is now worth. If they are in a situation where they need to sell the home, such as moving for a job, the owners will be forced to take a loss on the sale of the property.
Foreclosed Home Are Sold As Is
Don't expect to make a list of improvements after your home inspection on a foreclosed home, since many are sold as is. This may be a problem if the previous owners did not take good care of their home in the final days that they were living in it. Meanwhile, a short sale is still owned by the original owner, and the home is more likely to be in good shape because of it.
Foreclosed Homes And Short Sales Have No Room For Negotiation
The similarities about the two types of sales is that you are still working with the mortgage lender in each situation to approve the sale. This gives you very little room for negotiating, since the home is being sold at a loss in either situation. The lender will be unwilling to go lower than necessary.
The one exception may be if there are multiple offers on the home and you are making an all cash offer. Not needing to secure financing will help speed the process along, which is something the mortgage lender may be hoping for.
To learn more, contact a local real estate agent.
Share14 February 2020
