Hello Ann,

Glad to hear you are looking to purchase a home at a wonderful time like now. Home prices are at 7 year lows and interest rates are at 30 year lows. I have putting on a Free Seminar on Tuesday the 24th which would be a great way for you to learn about all the questions you may have about buying a home. If you are looking to purchase a home needing a little work, we have a great program to help you. FHA has a program that will allow you to finance up to $35k to rehab a home needing work. This way you take advantage of buying a home that is below market value and do the work yourself to make it the home you really want. It's a win/win situation. Hope you have a wonderful weekend.

Hi Ann Great Question!!

A Short Sale (often also referred to as a Pre-Foreclosure) is when a Home Owner has a mortgage higher than the current market value of the property. In these cases the homeowner must apply to their lender and ask if they qualify for a short sale and if the lender will consider one. If the lender approves that they will accept a short sale the home is marketed for sale at a current market level price. Sometimes there is one lender and sometimes there are mutliple lenders due to second mortgages and home equity loans. Dealing with multiple banks usually complicates and delays the decisionmaking. When offers are made on a short sale the homeowner first usually accepts them and then they are sent on to the lenders. This process generally takes 6 to 8 weeks but that can be shortened and also lengthened, that is the frustrating part for a buyer. Additionally, most short sales end up in a multiple offer situation and someone can come in at the last minute and make a better offer. Buyers of short sales need to be flexible. If you have time to wait you can get a great deal. If you need a house on a certain timeframe short sales are undependable for that. They really can be a WIN WIN situation for everyone. They help the Seller avoid foreclosure, The Buyer gets a good deal, and the banks save money because foreclosing on a property costs them a lot! Believe it or not Banks do not want to own this type of real estate, they want them sold as much as we do.

In a foreclosure, the bank has already taken possession of the property. These sales are As-Is sales meaning the bank is not going to make repairs or allowances on the property generally. Where short sales take much longer to get any feedback from the banks, Bank-Owned Properties or REOs generally get a much quicker response to offers. Usually within a couple of days to a week you will get a response. They may counter offer, accept or sometimes just ignore simply extremely low offers.

You can get great deals in both cases certainly. The first thing you want to do is to get prequalified if you need to get a mortgage. This will help you understand exactly what you can afford and having a preapproval letter will help when you submit your offer. You always want to have the home professionally inspected as well so there are no bad surprises. Many of these homes have been vacated to some time. Some have all the appliances removed, some are left in poor condition and others are left in great condition.

As to your timing questions again if you need a mortgage the will require 30 to 45 days usually now to close your loan. FHA and VA loans being government loans usually take the longer period. Everyone is being much more careful now in their lending practices. Once approved a short sale lender will want to close ASAP but usually you can get the 30 days from them. For foreclosed homes they usually allow 30 to 45 days to close.

You definitely want to get all your ducks in a row and educate yourself as you are doing! Best of luck to you! This is a great time to buy real estate!!

Patty Neri