One of the most asked questions from buyers wanting to jump into the market is "SHOULD I BUY A SHORT SALE OR A BANK OWNED HOME?" All the buyers have the same goal which is to get the best possible deal as prices stabilize and start heading up as we come out of recession.
The simple answer is iIt clearly depends on the amount of time you have to purchase and if you have the patience to be able to wait out a short sale.
Short sales can take a long time to get approved and your offer is not guaranteed to be accepted, you could spend money on home inspection, appraisal etc and end up losing that money. You can also get a great deal on a home in better condition than some of the bank owned homes. I tend to receive a lot of refferals from buyers who i have assisted with their purchase who were happy enough to refer their family, co-workers and friends so they can get a great deal as well. Having an agent working for you who is well experienced means the difference between getting your accepted, teh short sale approved and getting you the best deal you can get while trying to limit the hastles and stress of a short sale.
Buyers before entering into a short sale sceanario, you need to make sure you ask lots of questions to the short sale listing agent.
Is this house in foreclosure? if so chances are there isnt enough time for a short sale
How many loans or liens are on this property? Hopfully you have a buyers agent who can pull a copy of the title report becuase if there are liens or additional mortgages it is less likely this will be approved. in order to get it approved they need to negotiate all teh leins and 2nd mortages as well.
Is the listing agent experienced in short sales and who is negotiating for the seller? If they are not experienced, the short sale process will be much more difficult.
For a complete list of tips and advice on short sales, please see my blog below.
http://www.trulia.com/blog/scott_godzyk/2010/10/so_you_want_to_buy_a_shortsale_advice_and_tips_you_need_to_be_successful
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As far as a buying a foreclosure or bank owned home, you will not want to buy at auction in most cases if you are a first time buyer. You should buy a home where the bank has taken it back, cleaned it up, cleaned the title and is now offering for sale below market value. Having a buyer broker experienced in bank owned homes sure does help.
Where to start?
The first thing you need to do is be pre-approved for a loan. No bank will look at your offer without it. There is a difference between prequalified and preapproved. A pre qualification looks at your credit score, your income and liabilities you state and gives you a sales price you should be searching in. however a pre-approval will confirm you are able to get the loan by verifying your income, assetts and liabilities.
After being pre-approved you really should hire a a buyer broker, you can usually do so at no cost to you, they get paid their commission from the fee advertsised in MLS by the listing agent and paid at closing. This way they can get the information for you and you will have someone assisting you through each step of the buying process.
If you are in New Hampshire please contact me for assistance in finding a bank owned home that will suit your needs.
For a complete list of tips and advice on buying a bank owned home, please see my other blog below.
http://www.trulia.com/blog/scott_godzyk/2008/08/so_you_want_to_buy_a_for
AGENTS ---PLEASE FEEL FREE TO ADD YOUR TIPS OR EXPERIENCES WHETHER GOOD OR BAD...
Updated March 15, 2011
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