I know it sounds like a dry subject but since we deal with a lot with these types of properties, I thought I would explain how these listings work.
A short sale is basically a property that is being sold for less than what they owe the bank. The lender has to approve these sales and depending on how under water the owners are, will dictate how much the lender will pay for in repairs and a buyers concessions. Many times, the owners have not taken care of the property and they obviously don't have the funds to make any improvements so there may be some repairs needed. Expect to have to pay for some of these repairs prior to closing as the new lender will not lend on a property that has any issues.
When it comes to a foreclosure, you are dealing strictly with the lender who now "owns" it. These properties have usually sat vacant for many months and sometimes are not winterized or taken care of and will require many more repairs in order to finance them.
Both of these types of properties can make very good investments as they are usually sold for less than their appraised market value. When repairs are done then they will usually increase in value and give you a better return for your investment (ROI).
Now the question comes down to who pays for the repairs. As I said earlier, on a short sale, the owner will not have any funds and their lender is working with limited funds so they may not want to pay for any of the repairs.
On a foreclosure, if your offer is high enough to cover repairs (as long as the appraisal comes in high enough), then the lender might be open to paying for some of the repairs.
If the lenders or the owners are not able to pay for any of the repairs, then you as the buyer will be required to pay for the repairs or get a rehabilitation loan such as an FHA 203K program. Ask your lender about what is required for this type of loan. There are a lot of opportunities and benefits for buying a short sale or a foreclosure and there are several on the market right now. As of this afternoon there were 17 foreclosures and 28 short sales on the market here in Casper. 1 new listing came in over the weekend along with 6 price changes and 3 properties have sold. A great place to go to search for these are at www.casperforeclosures.info or www.casperdistressedhomesales.com.
A GREAT Short Sale buy right now is a 3 bedroom, 1.75 bath bi-level home on the eastside of town, with 1632 sq feet. Originally priced at $175,000 and is now only $149,500. Lender is open to ANY offers! Must go under contract this week or it will go to foreclosure.
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