I've been helping First Time Buyers for 23 years as a mortgage professional and I will tell you what I have always told my clients here in New York: If you are a First Time Buyer, steer clear of foreclosures and short sales.
Foreclosures are someone else's headache. The home probably has not been well-maintained and you're a First Time Buyer adjusting to paying a mortgage. Do you really want to walk in the door to someone else's deferred maintenance that YOU will have to pay for? Also, if you're thinking there are deals to be had in terms of lower prices, mostly those "deals" go to professional investors who can pay cash, negotiate hard with a Lender, and close fast.
For Short Sales, my attitude of late is that First Time Buyers should steer clear. Short Sales tend to be a better deal for the homeowner than for the Buyer. You'll wait MONTHS for the homeowner's Lender to approve the short sale; maybe as long as Six or Seven Months. Meanwhile, you're stuck in a contract to buy that home. I closed a short sale recently with a Buyer who, after seven months said this at the closing table, "I don't even want this house anymore."
And he didn't even get the "deal" on price he thought he was getting! The house appraised for only slightly more than he paid for it at the short sale price. He walked into this deal thinking he was buying a home for $100,000 less than it's value. In the end that wasn't the case.
There are plenty of motivated Sellers with their homes listed on your local MLS. Go find a good Local Mortgage Banker, get prequalified, then find a great, experienced Realtor, and buy the home you want at the price you're willing to pay.
PowerHouse Solutions, Inc.
1010 Northern Blvd. Suite 234
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
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I understand your concern. There are many factors that the bank that holds the current mortgage will concider prior to granting a short sale approval, they will be deciding on the final price as well. There is no set discount cap of % the bank will concider. The bank is looking to recover as much money as they possibly can and will be looking to accept a fair market value price, they might allow a small discount. Currently the sold to list price avarage on the market is about 93% to 96% give or take. Each situation is unique. If you are looking for detailed information on the entire process please dont hesitate to contact me, I will be more than happy to walk you through the entire process. It sounds like this is your dream home and since you are not in a rush to move you might want to proceed with this purchase.
In regards to obtaining a buyer's agent to represent you, this is a good idea regardless, everyone deserves to be represented in their real estate transaction, a listing agent represents the seller's best interests why not have a realtor represent your best interests as well.
I hope this gives you a little bit of comfort.
I wrote an article about short sales, you might want to read it. Please click on the link bellow.
It is worth it to have a buyer's agent who can team up with a short sale negotiator and can get you the best possible price. It's possile to negotiate a price drop of 10-15% of the existing mortgage amount. If you are interested or have any further questions, please feel free to contact me at (917) 797-9793.