subject: The Pros And Condos Of Buying Short Sales Vs Standard Sale Homes [print this page] Short sales can be a tempting way to go if you are wanting to land a quality piece of real estate at a bargain price. But short sales have their own share of challenges that may make buying standard sale homes more attractive, and vice versa. Before you lay your money down, it is important that you be mindful of both the pros and the cons to these two different forms of real estate purchasing. Especially as the country's economic climate continues to improve, it is important for you to have all the facts and make the decision that will allow you to buy at the lowest price possible and sell at the highest.
Short sale pro: Buying below market value
The nature of a short sale is to give the buyer a property below the market value price, while giving distressed buyers an "out" to avoid foreclosure. In this way, the short sale is a win-win for everyone involved. But at the same time, you also have to be mindful of the:
Short sale con: Back end fees and expenses
A short sale buyer may think he's getting a great deal, when he is, in reality, spending more than he would under a standard sale system. Of course, when the buyer has a competent short sale agent working to protect his best interests, this almost never happens.
Standard sale pro: Lending rates and building credit
When you buy a home the traditional way, you are raising your stock with creditors. An improved credit rating gives you a much better chance of landing the prime lending rates for the current and any future standard sale purchases. While you will have to deal with closing costs on a traditional home loan, everything is pretty much straight forward, where with short sales it can get trickier on the back end.
Standard sale con: Long term buys if you want to make any significant money
People invest in standard sale homes because they want the security that one provides. But with that security is the realization that a standard sale home is not just going to blow up in value overnight. It takes many years, in most cases, to see a significant increase in one's profits. While the profits are pretty reliable, many feel this is a con because one has to spend a considerable amount of one's life waiting for the prices to trickle upward where short sales could allow one a greater opportunity to "flip" for profit in a much shorter amount of time.
Both forms of real estate investment carry with them their own share of advantages and disadvantages. You'll encounter that with any investment, though. The key to success is in your preparation.
