What's with all the hoopla about short sales and foreclosures?
Everywhere you go these days there seems to be a lot of buzz about foreclosures and short sales. So whats all the hoopla? There are just as many good deals with homes that are listed as a non distress situation and the aggravation is far less.
What's a Short Sale? A short sale is still owned by the owner. Think of it as a preforeclosure. The owner has missed payments or received their notice of foreclosure. The homeowner owes more money on their piece of real estate than it is now worth. The owner secures an offer and submits it to the bank. The bank then reviews the information and accepts or rejects the offer. If they accept they let the seller walk free and clear from the deficit.
What's a Foreclosure? A foreclosure doesn't need much explanation. The owner has had the property taken through the process of foreclosure (filing, judgement and taking) The lien holder now takes possession of the property. The is usually a bank but can be any number of entities, a bank, a condo association, a private party, etc....
As a buyer, especially a first time homebuyer, there can be a lot of heartache and aggravation involved. Yes, there have been some great deals on foreclosures and short sales, but in many cases you might receive a 5-10% discount on the property, at best. But, remember, you will pay for that discount in aggravation.
What are the downsides of a short sale?
The owners now they are going to lose the property and tend not to care about the property.
In many cases they have had some deferred maintenance, there money issues have probably been going on for awhile.
Many agents listing short sales do not understand the process.
It can take 2 - 6 months to have your offer accepted. In that time a higher offer can be tendered, or sometimes with the bank the right hand does not know what the left hand is doing and the bank forecloses before your offer gets reviewed.
What are the downsides of a foreclosure?
There is no disclosure on the property, the bank has zero information on the house.
The property can be in disrepair.
The process with the bank can be frustrating, though much quicker than a short sale.
Pay especially close attention to water issues, water in the basement because the electricity was shut off and the sump pump didn't work or pipes freezing and breaking. Mold!!
Trying to do a home inspection can be a nightmare. You want to make sure all the utilities are turned on. Some banks it takes week to get that done, some charge a few hundred dollars to do that and some banks wont do at all.
Title issues may arise.
If you feel you want to consider a foreclosure or a short sale, I highly recommend hiring an attorny and finding a good agent that is familiar with both. Don't dismiss the regular listings, some of those people have to move and the deal can be just as good.
Happy House Hunting!!
Need to Short Sale Your Home in Massachusetts or New Hampshire?
Need to Sell Your Home Fast?
Need an Agent that can Walk you through Buying a Foreclosure or Short Sale?
____________________________________________________________________ This post “This Post the Tax Man Cometh was provided by Kevin Vitali of EXIT Group One Real Estate In Tewksbury MA. You can contact Kevin by email at kevin@kevinvitali.com or call 978-360-0422. I pride myself in the quality of my work helping buyers and sellers make dreams come true.
Real Estate Services in the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury