Foreclosure Vs. Short Sale: Which Makes A Better Deal?
People buy a house or a property for various reasons
. While some personally dream of having their own home, some buyers simply regard the process as a wise investment option. They see it as a potential ongoing income source and as an ideal financing vehicle.
But regardless of whatever reasons these real estate purchasers may have, one truth remains: people will always be on the lookout for the cheapest deals that can save them time, effort, and money. For this reason, many prefer buying distressed real estate properties over buying brand new houses. Not only are these estates priced less than the traditional ones, their values are also very much negotiable.
But which are better deals among the countless distressed real estate properties available: foreclosure or short sale?
The Battle Begins
People who have gone through this dilemma would sure understand the difficulty of choosing between these two irresistible options. Though technically, both homes fall under the category of distressed real estate properties, each also has their own advantages and drawbacks.
Foreclosure, for one, happens when the owner of the property can no longer pay the debt he has borrowed from the lender to purchase his home. In legal issues, the owners right is terminated and the lender already acquires the right to take the house. According to the figures acquired by FoxBusiness.com from Lender Processing Services, nearly 2.2 million homes in the U.S. were in foreclosure in April, 2011. On average, they were sold for about 30 percent less than a brand new or non-distressed property.
Short sale, on the other hand, is basically selling a property on real estate at a price that is not enough to meet the mortgage payments on the contract. Generally, it involves a long and tedious processing of financial records, tax and legal issues. Besides the large amount of time needed to close a short sale, they also normally cost more than repossessed properties. They are, however, mostly in better condition and are well-maintained compared to the other; hence, they need not be repaired or renovated after purchase.
While both types of properties are ideal investments, their advantages and benefits are always subject to the necessities and requirements of every buyer or investor. For instance, if a person cares about the time and price, he/she should consider buying a foreclosed property. In other words, any purchaser must really determine what they are looking for in a home before closing a transaction. Moreover, they should identify how much they could afford and how much they could give out for repair to know beforehand which investment deal is more appropriate for them.
Confused? Ask an Expert
Not familiar and knowledgeable about the process of buying
foreclosure vs. short sale properties? Well, you might be thinking of getting professional help from an expert.
A real estate experts role is to match prospective home buyers to excellent home value deals. They are also responsible in getting you familiar with all the legal laws and processes before buying. They have a list of what home buyers usually want and what complements best to their criteria.
As great deals only happen with a huge amount of confidence, patience, and vigor, it is really a big help to have a good real estate agent to back you up.
Widen your Options!
Looking for better real estate offers?
ForeclosureMagic.com is a free membership service that aids users find, locate, and invest in distressed real estate properties. Its mission is to provide home buyers and investors an up-to-date and comprehensive database of these properties that can be availed at discounted prices throughout the United States.
If you are interested in getting the best deals in your area, work only with the best. Activate your free ForeclosureMagic account today!
by: Greg Andrews
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