Buy At A Short Sale Or Just Wait For Foreclosure?
For the first-time buyers, a short sale happens when a seller’s lender accepts an offer which has a smaller value than the buyer’s unpaid mortgage just to sell a property.
Yes, it could be a great deal for the buyer in terms of price. But the downside is that shortsales take a very,very long time to push through. Since, most of the time, lenders are big banks, these bmv property deals take months before you can get a response. What’s worse is that you’d have to wait for months just to get rejected, and, unfortunately, this happens quite frequently.
In the event that you really just got to have the bmv property that’s being sold on a shortsale, don’t push the panic button just yet.
People who can’t bear the downside of shortsales just wait out the entire process until the house gets foreclosed on by the bank.
However, like in shortsales, you still have to go through the lender or bank in order to buy the house you want.
Buying houses on a foreclosure sale only goes as planned when there is only one bidder for the house, because when the house goes on an auction sale it’s the highest bidder that wins. So if there are multiple bidders, you must outbid other people to get the house. But if you’re a lone bidder then the chances are higher for you to close in on the bmv property leads.
But be aware that this isn’t always the case. There are times (although not everytime), where even the sole bidder can get snubbed by the bank since the offer is too low for their liking.
That’s why it’s important to get a feel of what the bank is looking for before you make a bid. You can try to gauge this by looking at their advertisement for the foreclosure sale.
How much is the opening bid? If it’s lower than the remaining balance on the house then there’s a big chance that you can really buy at a discount. But if the amount is the same as the balance then you’re in for trouble.
When the bank is looking for a bidder who is willing to pay for the balance of a mortgage, then this means they may not be willing to let go of the house or they are waiting for the house to gather dust.
Let’s be honest. No buyer in their right mind would do this, since they are looking to buy bmv property and not to pick up somebody else’s debt.
Based on the pros and cons of both strategies, I think that there’s really no better way to buy a house between the two.
It just boils down to how much patience you can spare for the sake of being a homeowner. If you can wait for the lender’s reply, then go for the shortsale! However, if you can’t stand waiting for months just to get rejected, then buying through foreclosure would be better.