Should You Buy a Foreclosure or Buy a Short Sale?
Many people are asking the question should I buy a
foreclosure or should I buy a short sale? There are
pros and cons to each situation. As you take into c
onsideration which option is the best choice for yo
u,
you should understand both the process and the over
all success rate of each type of transaction. First
,
know the difference. When you buy a foreclosure, yo
u are buying a property that is bank owned, or a
third party organization may own it. When you buy a
short sale, you are buying a property still owned
by
the original property buyer.
Where Is The Deal
Perhaps one of the most important factors to take i
nto consideration is which is a better deal. If you
buy
a foreclosure, or if you buy a short sale, you may
be looking for the lowest price on the best propert
y. In
the Myrtle Beach real estate market, for example, t
his is one of the most critical aspects to consider
.
Here are a few things to keep in mind:
By some estimation, a short sale will cost the bank
up to 18 percent before expenses in terms of
the loss they take. On the other hand, foreclosures
cost the bank as much as a 28 percent loss.
Many states have falling property prices. This mean
s that if the bank holds on to the property
through the foreclosure process, it stands to poten
tially lose more as the value of the property
continues to fall.
Short sales offer a faster solution for the lender
and may offer the lowest price for the buyer.
Short sales are not always the best option for the
bank and that matters less when the bank
already owns a great deal of real estate it cannot
sell.
Overall, the number of people that buy a short sale
is increasing because it allows the bank to get ou
t of
the deal faster. As you consider whether to buy a f
oreclosure or a short sale, keep in mind that each
transaction is different. Hire a real estate agent
experienced with short sales to work through the
process with you.
