Should You Buy a Foreclosure or Short Sale? Leave a Comment 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.