Buying Distressed Properties
What is a Foreclose Home?
Sometimes referred to as
Purchasing a Foreclosed Home
Purchasing a foreclosed home is not the same as purchasing a market value home. When purchasing a foreclosed home, you’re working directly with the bank and trying to make an offer that the bank is going to approve.
Generally speaking, the process of purchasing a foreclosed home may take longer than a market value home. But the benefits are pretty incredible. You should be aware of the fact that foreclosure properties are sold "as is," which translates to the fact that limited repairs have been made.
Another caveat of purchasing a foreclosed home: If you decide to purchase a U.S. Department of Housing and Urban Development foreclosed
Finally, getting financing for foreclosed properties can be more difficult than traditional housing. Generally, banks expect buyers to show up with lots of cash or at least a line of credit with your bank, upon which you can draw cashier’s checks.
What is a Short Sale?
A short sale occurs when the seller owes more on their mortgages than the current market value of their property. Once the seller receives an acceptable offer from a ready, willing and able buyer, negotiations and concessions must be made so that the lender will accept a sale at current market value as payment in full for the loan. Sometimes the homeowner in this situation may have the mortgage debt forgiven.
Purchasing a Short Sale
There may not be enough time to complete the short sale before the foreclosure. The buyer may cancel the sale prior to acceptance of terms by the lender based on the terms of the short sale addendum. There may be multiple lenders in which case they have to negotiate