Some of the most asked about properties in Northern Kentucky real estate are short sales. A short sale simply indicates an owner is selling their home in a real estate market that will not support what they owe. Many people have been led to believe that short sales are the best way to buy a property, yet that is not usually the case.
In a market where values have fallen as they have for the last 4 years, banks are less and less likely to take a offer significantly under the homes value. What many buyers do not realize is that the bank will appraise the property before approving the short sale, and they know what it is worth in today’s market. Since the lender is already taking a loss from the original mortgage, they are more likely to stick to approximate market value. I've actually seen cases where short sales are priced a little over the current market, yet people assume it is a good deal.
Lender owned (REO) properties are often better deals. Banks and lenders are not in the business of owning real estate. They would much rather collect money. So lender owned properties are often aggressively priced, yet as of late we have noticed that they too are priced close to market value and are not willing to give up too much ground. Lender owned properties often have maintenance issues that have to be factored into the price as well. Although margins have gotten smaller, lender owned properties are still easier to purchase for a good price, than a short sale.
A more traditional option is a straight sale. Despite the buzz, a traditional seller with equity is often your best bet for a great price on a well maintained property. When looking for your next home, don’t limit your search to short sales, or lender owned properties. Your dream home may be waiting with its owner still living in it!