Today, homes for sale can be grouped into one of three broad categories:
1) Foreclosures
2) Short Sales (Pre-Foreclosures)
3) Traditional Sellers
The relevant question is where can you get the absolute best deal? Having been a real estate broker for more than 25 years, here’s my take.
Foreclosures are perceived by the average home buyer to be the VERY BEST DEAL because in many instances, there are CHEAP. The reality is that they are priced at market for their location and condition. If the foreclosure is an abused property (and many of them are) the price must be low to attract a buyer that is ready willing and able to undertake a renovation of the property. If you are handy and have a bucket of cash, a foreclosure may be your best deal. These deals can be closed in 30 – 45 days.
Short Sales are homes that are being foreclosed on. The owners cannot continue to make the mortgage payment. From the banks perspective, “the first lose is the best lose.” The bank is willing to take less that what they are owed to not have to go through the expense of foreclosing, taking possession, maintaining and reselling the property. You can expect a Short Sale to sell 5% to 10% below comparable houses on the market. You are thinking Voila! I found the answer. Not so fast Cowboy. A bank is losing money when they agree to a short sale. With the number of short sales banks are dealing with, they need to assure their stockholder and investors that they are taking the smallest lose possible on each and every deal. Short Sales offer some of the best prices on nice homes. Remember in many cases, the owner is still in the home and caring for it. The downside is that the bank can drag these transactions on for 3 to 7 months and there is NOTHING that you, your agent or your attorney can do to close one of these deals in 30 days. To take advantage of a short sale, you need to have time and patience and hope that your mortgage rate does not rise before you can close on the house. If you don’t have the time, don’t buy a short sale.
Traditional Sellers provide some of the absolute best deals for the average home owner. The prices of these homes have been driven down by foreclosures and short sales. For these homes to sell in today’s market, they MUST be perceived as a GREAT DEAL. Motivated sellers are primping their homes like a 16 year old girl going to a dance. They are painting, re-carpeting and fixing their homes to make them stand out. When they are priced at market, they provide really nice homes at great prices.
THE ANSWER: It’s Dealer’s Choice. Pick the category that fits your “Time” and “Money” situation. Happy House Hunting.
Wayne O'Day
The O'Day Team
Premiere Plus Realty - Orland Park IL
For even more helpful information, visit www.TheODayTeam.com
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