More and more often I have been dealing with buyers looking for "Short Sales" or "Foreclosures" attempting to get the best deal they can. Sometimes these buyers are in a lower price range (here in Dane County the Median Home Price comes in just over $190,000) and they feel foreclosures/short sales are their only options, and sometimes the buyers are investors looking for a good opportunity to "Fix and Flip" a property.
If you are the former, and you are looking to purchase a Short Sale or bank owned property here are a few things you need to know before you begin your home search.
A) Just because Foreclosures are generally on the lower end of the range does not mean a Foreclosure is necessarily your best option. Many Foreclosures or Short Sales require significant repairs before they can be considered live-able. Some of these defect may affect your ability to obtain financing for the home. After you purchase the home and put all of the money in you may end up with a better deal just buying a home that has already been renovated and fits your needs right away.
B) A Foreclosure is a Bank Owned Property and Banks accept the "cleanest" offers they receive. More often than not a Real Estate division of a bank (REO) will accept a lower priced cash offer over a comparable full price offer with a financing contingency. These "cash offers" generally come from investors, can close very quickly and have no contingencies allowing the buyer to back out of his/her contract.
C) A Bank may take up to 60 days to approve a property for Short Sale. A buyer working in a tight time frame to purchase may simply find the process of purchasing a Short Sale tedious and strenuous. The waiting and wondering can be very stressful for some buyers, while some may handle it fine. Be aware that if you are writing an offer on a short sale property you may wait a long time for an answer either way.
D) Make sure you are working with an experienced Realtor and Lender when buying a Short Sale/Foreclosure. An experienced agent will know how to write the strongest offer you possibly can, therefor increasing your likelihood of having your offer accepted. An experienced agent will also assist in coordinating loan commitment and title work to make your loan process as smooth as possible and can advise you as to what physical defects may affect your ability to purchase the property.
E) Get all of your Ducks in a Row before applying for a loan/writing an offer. Bank owned Real Estate divisions want the cleanest offer possible. Buyers needing down payment assistance, seller paid closing costs and other financing contingencies are looked at less favorably then those buyers with their own down payments and closing costs. Work with an experienced lender to make sure your credit is in shape, you have a down payment if necessary and your offer is as clean as possible to increase your chances of Bank acceptance.
Making sure you have a solid offer free of as many contingencies as possible is the best way to increase your chances of having your offer accepted. Remember, buying a foreclosure or short sale does not mean you will receive the best deal in your price range. ALWAYS contact an experienced Real Estate Agent to assist you in your home search.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment