Foreclosures are costly, time consuming and represent an additional loss for the lender, because of the inclusion of both legal fees and court costs. Short sales transactions are becoming a more viable choice in situations involving financially stressed home owners.
However, don't be fooled by the name; 'short sales' are often 'long' sales with much ongoing haggling, mediation and negotiation. They are almost never straightforward, but having said that, they offer an opportunity for prospective buyers to get a bargain-priced home. In effect the 'cost' of the home is reflected in the patience and tenacity of the buyer and the buyer's real estate agent.
Your real estate agent will know that the seller legally has to be in default before a short sale can proceed, public records must be checked and there are certain 'pecking orders' for negotiating with lenders, (usually you will deal with the second lender first!) The real estate agent will steer you through the complicated procedure which is largely unfamiliar to the general public. Your agent will also be able to negotiate with your real estate lawyer when the time comes.
Now is certainly a good time to get pre-approved and 'lock-in' some financing prior to starting a search for a short sale home. The rate dropped again this week and if you mortgage now you will save $50.00 per month over last week's rate.
Many prospective buyers are waiting for the all-time low, as we are almost there! Of course, logically, we never know when we have hit the bottom until the rate starts to creep up. At that point, everyone rushes to lock in, but in effect we have already missed it! But if you do get pre-approved and are looking for a short sale, it may help your search and eventual purchase if you are aware why some short sale homes are more difficult to buy than others.
For instance, if a home has more than one mortgage on it, it gets more complicated and needs more negotiating with more people. One problem that immediately arises is to actually agree the 'new' value (and therefore your price) on the home.
The more people who have a financial interest in the property, the harder it is to agree on anything. So try for a home that is on a short sale list that has no more than two lenders, and preferably only one. If you can find a home with only one lender, it is really worth trying for that one.
Be prepared to truly negotiate. This means that you DO have to concede on some points, so pick your battles! Do not convey the attitude that you are doing them a favor, this is a two-way stretch. Always follow the advice of your real estate professional on matters of legality. The short sales transaction is not conducted or concluded in the manner that you might be used to, but your agent knows the ropes.
Being able to say you own a home is something special, but it is not for everyone. There are pros and cons to buying a home versus buying a condo. What may be for you may not be for someone else. It just depends on what type of person you are and what you are looking for at the time. Here are some of the pros and cons to both.
Buying a home
When it comes to purchasing a home, there is no doubt you will get the family friendly environment. You will have your own yard that you can have fun on and can plant flowers to add to the home. The backyard will have a fence so the kids can play without being in danger of the street.
In addition, typically a home is going to have more square footage than a condo. Plus, there is nothing quite as family friendly as being able to have your own pet. While some condominiums do allow you to have pets, most prohibit it.
Outside of the family friendly benefit, having a home will certainly provide you with a greater living space. If you have a family with kids, it is beneficial to have that extra space. But adults need the extra space as well, not just the kids. And if you work from home, having an office in the home can be a big deal. So what are the downsides to having a home?
First, there is the upkeep that you are responsible for. This includes inside the home and outside with yard work and painting the home appropriately. And the bigger your home is, the more money you can plan on spending to keep the house in top shape.
While it is nice having the extra space in a home, there is also the need to fill this space with stuff. This leads to spending money on items you probably do not need, but it will make the house look nice. Plus, your heating and air conditioning will be higher because of the extra space it needs to fill.
Buying a condo
As for a condo, if you lead a busy life it is extremely easy to keep up. There is little home maintenance to take care of and no yard work to worry about. And the location allows you to live right in the heart of the city.
On the downside, having a condo equals having numerous monthly fees. Some of these fees include going toward the upkeep of the property and the development of the property. As crazy as it may seem, adding these with the monthly mortgage payments can end up being just as high as a house of the same value.
There are the pros and cons to both, but it is up to you to determine which is best for you. If you lead a busy life and do not have a family, a condo may be the ideal route. But if you have a family and want to settle, having a house of your own is probably the way to go.
Both Susan Zanzonico & Adil Esmail are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Susan Zanzonico has sinced written about articles on various topics from Investments, Real Estate and Mortgage. This article was written on behalf of top-selling ®, Susan Zanzonico. Susan has won a number of awards in her field, and has exte. Susan Zanzonico's top article generates over 33100 views. to your Favourites.
Adil Esmail has sinced written about articles on various topics from Sell Home, Real Estate. A sale representative for Century 21, Adil Email can assist buyers in their search for a as well as market information. F. Adil Esmail's top article generates over 4400 views. to your Favourites.