subject: Repo Properties or Short Sales? [print this page] With the foreclosures sector being a thriving buyer's market, repo properties and short sales appear to be viable options for great bargains. Short sales are homes that are offered to the market for a price that is lower than the total value of the mortgage owed. Repo properties or real estate owned properties on the other hand are homes that have been foreclosed on and are being offered either by way of a public auction, through realtors or directly by the bank.
The waiting time before buyers know whether their offer to buy has been accepted is shorter for repo properties, which only takes a matter of four weeks. Homes sold through a short sale may take anywhere from six to nine weeks before prospective buyers know whether their offer has been accepted.
Both homes are sold as is and it is made clear that the buyers would shoulder the cost of repairs. For both repossessed homes and short sales, negotiations can include talks on minimizing the price due to the apparent damages in the home. Both forms of foreclosures are open for inspection before purchase and buyers must stipulate that the agreement to purchase be contingent upon the results of the inspection, meaning the buyers can pull out of the deal depending on the findings of the home inspector.
Repo properties always come with a clean title eliminating the need for a title search to reveal hidden taxes or liens. Buyers of short sales should always conduct a title search precisely for this reason as all holds or encumbrances attached to the title become the problem of whoever is the owner of the property.
Who Takes Care of the Closing Costs?
Repossessed homes typically come with an affordable down payment and the bank or lending institution shares the burden of paying for closing costs in some instances. In short sales, the buyer is responsible for all the closing costs of the purchase as well as the full amount of the down payment.
