I've been helping First Time Buyers for 22 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. It's a Buyer's Market, after all!
If you plan to buy a home through a FSBO without an agent then there are some drawbacks. First of all, when you choose not to use an agent your deal can go on forever. Agents have the inside scoop on everything that is going on with the seller in order to protect you and your finances. An agent will is the person that works with all those involved such as the seller, seller and buyer attorney, mortgage broker for you and the seller, inspectors, appraisers, engineers, surveyors, and title company.
As you can see, there are many people involved in a real estate transaction and each of them have many responsiblities all overseen by the agent and or broker. There are many details and paperwork involved to get you from point A to point Z. Protect yourself by using a skilled real estate agent and an experienced real estate attorney and together they will protect all of your interests.... more