Have you ever wondered about what type of home buying transaction (short sale, bank owned, private sale, or HUD home) is better for you and your family? Have you dreamed about buying a short sale, but is concerned about all the negative things and war stories you have heard about short sales? Do you love the idea of buying a great house at a great discount?
this article we will try to answer these and similar questions we hear
from home buyers almost on a daily basis. We will provide an overview of
each type of transaction and we will share our own experience working
with each one.
known as "traditional" or "regular" sales. These are the transactions
where the home seller is selling his house to the buyer he chooses. The
seller does not need an approval or authorization from the bank that
holds the mortgage. In this type of transaction the home buyer will
bring enough funds to pay the balance of the original mortgage.
As a general rule, homes sold through these "traditional" sales are usually in better condition than bank owned homes. However home buyers should also expect to pay more because most home owners will want top dollar for their homes.
benefits of buying through a "regular" transaction is that the buyer
can negotiate repairs and response times are usually very fast.
Bank Owned Homes
Also known as foreclosed homes.
These are the homes banks obtain through a foreclosure process. They
usually take longer to close than a "regular" transaction but not by
much. Banks want to close as fast as possible. However they have lots of
internal steps, approval levels, and bureaucracy that they have to go
through before they can transfer the house. And each step adds to the
overall timeframe of the transaction.
Buyers can usually find a
good deal if they are patient and willing to walk away from the
transaction if the bank becomes unreasonable. Banks usually do not
repair homes they get through foreclosure. As a result, bank owned homes will typically require some repairs.
are homes owned by the U.S. Department of Housing and Urban
Development. They are sold through an electronic auction to the highest
bidder. Buyers should expect to find properties in similar condition as bank owned homes.
A benefit of buying a HUD home
is that the home buying process is very well defined and follow a very
strict timeline. Home buyers usually receive an answer within 24 hours
of bid submission and a typical transaction closes between 45 and 55
days from the date when the bid was submitted.
Short sales are sales when the owner owes more on the mortgage than the house is worth. Short sales need to be approved and authorized by the bank(s) holding the mortgage(s).
Houses in short sales are typically in better condition than bank owned homes.
Most owners that are trying to complete a short sale will maintain the
property throughout the process. In many cases the owner is still living
in the house during the short sale process and will move out orderly
once the house sells.
One of the challenges in buying a short sale home is that there is no guarantee that the bank(s) will approve it. So, home buyers that want to pursue short sales
usually need to be very patient and be willing to wait for the outcome
of the transaction, which can take anywhere from a couple of months to 4
or 5 months.
Home buyers can get some amazing deals with short sales, as long as they are patient and they are willing to walk away from the transaction if the bank becomes unreasonable.
This post was originally posted at www.MyFirstHouseAZ.com/blog.