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Short Sale, REO or Foreclosure. Type of Sale Matters to Buyers.
While the present ecomonic situation in this country is uncertain, one thing remains unchanged. Markets will rise. Markets will fall. Markets will Recover. Savvy Investors/Buyers will Profit.
Too much inventory, and too much absurd lending and borrowing, have Americans facing the worst housing market since the great depression. While this is not new news, the opportunities in this market may be.
Home buyers with money in the bank, a job and good credit have not been in such a great position in decades. Price declines and record loan defaults have made bargain hunting for a home a lot more fun. The McMansion, many believed they could never afford, is now well within their grasp.
So, what is the truth about getting a great deal in this market? Are some properties easier to buy than others? Can you really get a steal from lenders sitting on unsold inventory?
The answer is YES, but there are big differences in the types of distressed property being offered for sale.
- SHORT SALES: A short sale is one in which the borrower is behind on their mortgage, but they still own the property. Usually, the borrower owes more to the lender than they can sell the home for (upside down). Usually a short seller will ask the bank to consider any offer on the property and “forgive” the outstanding loan balance. A short sale is good for the home owner because short sales do not reflect as poorly on their credit report. Short sales are good for the lender because they don’t have another vacant home on their books.
- MAKING A OFFER ON A SHORT SALE HOME: This is the most difficult type of distressed housing to make an offer on. Unless you have a lot of patience or an unlimited amount of time to sit and wait for a response to your offer, you may want to seriously avoid properties advertised as Short Sales. Truefully, very few, if any, offers made on Short Sales ever close.
- REO’s and Foreclosures: These are bank owned properties and there are plenty to choose from. These types of listings sell very quickly. Generally the buyer can be sitting in their new living room in less than 30 days after submitting an offer on a lender owned property.
- MAKING AN OFFER ON A FORECLOSURE OR REO: Banks are completely detached and unemotional from their home listings. They know exactly what they need in terms of price, they know the local market and they love quick closings. That being said, you won’t be successful offering 75, 80 or even 90 percent of the list price. You will more than likely be out bid, as often the winning bid is over the list price. Keep in mind that the bank is not like a human home seller, they usually never counter low ball offers, they simply move on to the next offer in the pile.
Thanks as always for visiting InfoTube.net. We are here to help you sell and buy, so let us know your thoughts.
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