To add to the information that has already been provided, closing costs which involve the costs associated with the loan can often be paid by the Seller. Commonly these will run around $2,500 depending on the lender but can go higher if you buy down the interest rate by paying "points". One point is 1% of the loan amount so you might get a better interest rate by paying .5% or more up front. The FHA loan is very common right now because you only need 3.5% down. My best advice to you is to sit down with a good mortgage lender and determine 1) how much you can comfortably afford to pay per month and 2) the amount of closing costs that you will have to pay. Don't forget about taxes and insurance. These amounts are also included in your monthy payment and taxes can be significant.
If I can help please feel free to contact me. I would also be happy to refer you to a couple mortgage lenders.
Prudential Snyder and Company Realtors
My name is Tyler Weston and I have been working for apartment communities in Ypsi, A2 and Belleville for 9 years. To answer your first question the big difference in Short Sale vs. Forclosed on is this........dont even try to buy a short sale unless there are absolutely no similar forclosures available. When you see the word Short Sale equate that with "NOT AVAILABLE" and life will be much easier for you.
I have rented to people that have waited in thier apartment with thier boxes packed and paid month to month fees (expensive!!) for an entire year while WAITING for a short sale only to have the entire thing fall through, leaving them stuck in their apartment.
A good realtor that is ready to work for you and your needs would never put you in this situation. And Lucy I am that guy, if you need help my advice is always complementary and I would love to interview for the job of working for YOU.
As far as how much you need to put down it can be zero through an awesome loan program I was able to buy the house of my dreams through right down the street from you in Ypsi Townshop, call or email me for details (734)-657-3439, firstname.lastname@example.org.
The difference is the time necessary to close the transaction.
Foreclosure - about 30 days
Short sale - 3 to 10 months,maybe longer or maybe not at all
Once you have your approvals in place and you have a closing date, you still have to perform all the items on the contract (inspections, appraisals, surveys, title searches, escrow) no matter whether it's a foreclosure, short sale or privately owned property.
If you are interested in a bank owned, pay careful attention to the time frame of the contract. There is little to no room to make a mistake.
A short sale can be frustratingly long, but you may be able to get a value for your money.
Talk to your lender about closing costs and then have a budget in mind for repairs and updates. - DON'T go over that amount for planning purposes - you will most likely have at least one surprise.
The amount of out of pocket money depends on the type of loan you are getting to purchase either a short sale or a foreclosure.
On a foreclosure the bank bought the home back at a sheriffs sale and it has gone through the 6 months redemption period that allows the home owner to redeem the property back. This is done by paying all the back payments and fees.
A short sale is when the home owner must sell the house for less than what they owe the bank. The Short is in terms of money, not in the length of time.
Short Sales in the Ann Arbor, Ypsilanti area can take 90-120 days to get approved. Foreclosure's usually close in 30-45 days.
We have a high success rate in getting Short Sales approved, if the buyer is willing to wait.
The main answer is ... TIME.
In a short sale, the bank is not yet the owner, but must agree to the terms to allow the sale to happen ... which may take weeks, months, or may never happen at all. A true foreclosure (already owned by the bank) will take less time, as the bank is the only decision maker and signs the documents.
Many people think that the bank signs the contracts in a short sale ... and that is FALSE.
Hope that helps! If you are looking to explore your options in purchasing a home, please contact me for more. Thank you.
With a short sale, the home is still owned by the seller. The seller is having problems paying the mortgage and can't sell the home for what they owe on it. In this case, the seller gets an offer on the property and then attempts to get the bank to accept a short sale. The bank is going to be "shorted" the full amount of money they are owed on the home and the seller must prove a hardship.
In some cases, it can take the bank months to respond to a short sale offer. With foreclosures you typically get a reply on your offer within a few days.
In each situation, the homes are sold as-is. The bank won't usually do repairs on a foreclosure property and with a short sale the owner doesn't usually have the money to do any repairs.
The amount of money needed is going to depend on the loan type (FHA requires 3.5% down) plus the closing costs. I am not sure what closing costs are in your state.
Hope this is of some help.
Long & Foster Real Estate, Inc
Lehigh Valley Office, PA