Buying a Short Sale VS Buying a Foreclosure? Know the Right one for you…
When looking for the properties priced below the market rates, foreclosures and the shorts sales are the main motivations of buyers. Whether you are an investor or are looking for a house to relocate, these type of properties are a good option. However, you need to do your homework in order to take your deal to the finish line as buying a short sale or a foreclosure both are risky.
In this write-up, we are going to explain the difference between both along with mentioning their pros and cons.
A foreclosed home is the one that belongs to the bank or the lender holding the mortgage. Such a property is ready for sale once the legal process for the foreclosure is complete. Though you will get a foreclosed property at a rate below than the actual market value, you cannot view the property from inside before making an offer on it. Here are the pros and cons of buying a foreclosure.
- Deals for the foreclosed homes take less time as compared to the short sales and that’s why they are considered as a better option. As in the case of foreclosure, you mainly deal with the bank or a lender whose primary goal is to sell the house quickly, the procedure takes less time.
- The foreclosure properties are available at a right price. If you are not much worried about the “as is” factor, foreclosures are a good from the point of price.
- In the foreclosure, you are not required to pay any seller-related costs. The bank/lender provides a clear and free title of the property upon closing.
- The biggest disadvantage of buying a foreclosed house is you can’t check it or get it inspected before you buy.
- As the foreclosed homes are sold “as is”, they require a lot more repair work. And the bank is not going to pay, even for the necessary repairs. So, as a buyer, you need to be prepared for that. Though not necessary, as the foreclosed homes are kept vacant for long, it can be a costly deal for you.
A short sale is an agreement between the homeowner and the lender that is signed to sell the house before it goes into the foreclosure. Actually, it is the way that is used to stop foreclosure in Houston. You can go for this option if you are not in hurry to buy a house. Here are the pros and cons of buying a short sale.
- As a short sale properties are still occupied by the homeowners, they are often in the good condition. All the utilities are in use and you also don’t need to worry about the maintenance.
- As foreclosure not only takes extra time but it also requires the banks to do more efforts, banks are always willing to short sale. So, you can expect negotiation to some extent.
- Short sales take more time as compared to the foreclosures; it can take even six months.
- As short sales need approval from the lender, you may need to increase the offered price if you are serious about closing the deal.
“Both the options are good, provided that you are ready to deal with them. To know which would be more suitable for you, you can consult a Houston short sale agent or a foreclosure agent. As they deal with such proceedings on daily basis, they can provide you a better guidance.”