Owner's Network -REO, Short Sales, Foreclosures

Why A Foreclosed (REO) Or Short Sale Property Is So Attractive Today

www.realestatelist.com/articles/Article30215.htm
Mark Anderson, Owner’s Network Real Estate- Broker, Realtor®, Green designation
Published June 10, 2009

For some families that have the financial stability and the ability to purchase a home, this is an excellent time to purchase an upgraded home. The only catch for most families is that they have to sell their current home before they can qualify for another home. There is also the issue that they will probably have to take a loss on their current home in the sale in this market. However, they can make a larger or better featured step up home with the money that they get from the sale. This is especially true if they have a sharp real estate agent, some persistence and patience.

Let’s go over the two widely talked about homes in the market today- Foreclosed (REO) and Short Sale homes. These are such hot items now because of the simple fact that the bank is willing to take a hit on selling the home, sometimes a significant reduction in price from it’s last years value. A home owner will potentially take a hit if they choose to sell their home but most will hold off until the market improves.

However if they have mortgaged their home to the max and the value has dropped significantly in their neighborhood, many will choose to walk from the home and not take the hit themselves. They will however take a credit hit but that will only last at most 7 years. This is a gamble. Will they ever recover that loss of value in that time? Many homeowners think not and would rather have their income buying power leverage themselves into another below market home. (See how this can financially benefit a foreclosure homeowner). On the other hand, a Short Sale forces the bank to take that hit while it has only a small affect on the homeowner’s credit. A double win if they can get the bank to accept a deal.

That is why Short Sales and Foreclosures are so attractive. The odds are better to find a greater value in homes when negotiating with the bank than in non- distressed properties. The advantage is even greater if you find a home in great dis-repair and the bank has dropped the price accordingly. Many families plan to remodel on the surface or significantly anyway so the bank has just saved them even more money.

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