I just posted this article on my Massachusetts First time Home Buyer
site.Â It really brings into question whether short sales and foreclosures return the savings that many home buyers think.Â At the end of the day, my advice is look at the entire market, don't hyper focus on foreclosures and short sales and miss other great opportunities elsewhere.
The interesting part of this article is the comparison of sold condominiums in one complex over a 2 year period.... Are the foreclosure and short sales really saving you money?The Article
Many home buyers, whether they are first time home buyers or not, get excited about foreclosure and short sales.Â Is a foreclosure or a short sale always a bargain?
Absolutely not, many times a foreclosure or a short
sale can turn into a nightmare.Â When looking at foreclosures and short
sales, it is important to determine fair market value of the property
first.Â In many cases with a foreclosure or a short sale there is much
work to be done to bring it up to the level of the comparables you used
to determine fair market value.Â Work from fair market value and
subtract the cost it would take to bring it up to the level of the
comparable properties you used to determine value.
Potential Problems with Foreclosed Homes
- Many times a foreclosed homeâ€™s condition is sub par as the home
owners lost interest in the home nor have had the money to keep up the
- Sometimes home owners do damage to the home on their way out in their anger towards the bank.
- The bank will have absolutely no disclosure on the home as they had not lived there.
- Buy the time a home hots the market it could have been vacant for
many many months.Â I have noticed that vacant home deteriorate quickly.
Potential Problems with Short Sale Homes
- The long waiting time to see if your offer has been approved.Â Typically about 90 days.
- Most homes that are short sales the home owner is having financial distress and have not been able to upkeep the home.
- Much like a foreclosure, if a short sale home is vacant for a long period of time the home can deteriorate quickly.
â€œThe National Association of Realtorsâ€™ January housing survey,
released last month, found that 35 percent of houses on the market were
either short sales or foreclosures, up from 32 percent in December and
29 percent in November. Of these, 37 percent were categorized as being
â€œbelowâ€ or â€œwell belowâ€ average condition, sometimes resulting from the
ravages of abandonment, others from damage inflicted on homes by
disgruntled owners forced into foreclosureâ€ as reported by the New York Times
Compare Short Sales vs. Foreclosure vs. Regular SalesÂ Read More....