Short Sale vs. Foreclosure – What’s the difference?!

I have had several questions over the last few months about the difference between purchasing a short sale or a bank owned foreclosure.  When it comes to financing there is not a difference between the two.  When you’re looking at homes and you see that it is a short sale, there a several things you need to take in mind.  short sale vs foreclosure property guidingFirst,  the price that the home is listed at is not always the price you will pay for the home.  Your agent will make the offer to the listing agent, have the seller sign the offer, and then send the offer to the bank holding the mortgage for the seller.  The bank will then begin a process to determine if they will accept the offer or counter your offer with a new price.  When you are making an offer on a short sale you have to be prepared to wait.  A short sale is not ideal for someone who needs to move into the home within 30 or 60 days.  You can’t lock your rate (you will have to float your rate) until the bank has accepted the offer and your seller has received the short sale approval letter.  If the appraisal does not come in on the property, the option of renegotiating the price has to go back to the back.  With a foreclosure, you are dealing directly with the authorized person from the bank to review your offer and accept the price.  The foreclosed homes are typically “as-is” and any repairs that may be required by your appraiser will need to be completed by you, the buyer, to secure the loan.  You can lock your loan once your offer is accepted and plan on a closing within 30-45 days of the completed contract.  As you look at homes remember- as far as financing is concerned, either can be done with several loan programs.  The big difference is the time frame you have to be into the home, and if you are looking to lock in on current interest rates.  If you have any questions about your mortgage financing or becoming pre approved to purchase a home feel free to contact me- Kara Holleran, Genesis Lending Group 239-246-6000.

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Posted on October 8, 2012, in Finance and tagged , , , , , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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