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Short Sale 4 Homeowners Home-Buying Tips:
Homeowners need to understand their options: Home-buyers can purchase foreclosed properties during the short-sale process which would be prior to a foreclosure. This enables the homebuyer to purchase the property directly from the distressed homeowner before it reaches the bank foreclosure stage. If a home is lost in a foreclosure, an auction takes place, where multiple perspective buyers will bid against each other. Typically an auction will drive the sale price up considerably.

Always have your real estate broker or realtor do a search on title. The title search will give you a better reflection of the properties' history while also enabling you to find out whether the property has another lien against it. If the property does have another lien, you should know before you purchase a home foreclosure, because you could be responsible for paying off any mortgage loans and any liens against the house before you can completely take ownership. You should know that if you buy the home in an auction, you may not have the option of conducting a formal property inspection prior to the sale. In most cases, homes sold at auctions are usually sold "as is" and this may create an issue for your perspective mortgage lenders that requires an inspection.

One of the major concerns of purchasing a home that was recently foreclosed upon is the lack of disclosures usually needed to buy a property with good confidence. The mortgage lender and real estate brokers are always required to disclose what they know, but often times no one has any relevant information to disclose. Most States have a Seller's Property Disclosure Statement (SPDS) which contains a lot of important home inspection information. Unfortunately if you're buying a home from a foreclosure, you are foregoing all that information and will have to do more research yourself. That is also another reason to make sure that your inspections are thorough.

Why are Short-Sales and Foreclosures on the Rise? The short sale option is an excellent alternative to a foreclosure. The experts say that short sales are on the rise because more financially strapped homeowners fall behind on their mortgage payments and see their homes' values plummet to less than what they owe.

As a result, they are turning to short sales as a way to avoid foreclosure. A short sale salvages a borrower's credit by keeping the up to 10-year black mark of foreclosure off. "Banks aren't happy about short sales," said Sherri Frost, a senior loan officer with Sherman Oaks-based Metro Cities Mortgage, "but they have few options." > Read more about Foreclosure Alternatives

 
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