Finding the Right Kind of Home in a Tough Economy

With the nation’s housing inventory bogged down with foreclosures and short sales, some home builders are willing to strike a deal with potential homebuyers. Individuals that are looking for a new abode in these tough times may see some great deals out there, but it is essential to evaluate all of the options prior to solidifying a choice concerning which of these possibilities is best. Not all foreclosures and short sale homes are the bargain they may appear to be, and not all home builders are haggling, so do not count out the traditional previously lived-in home as a possibility just yet.

When looking to get the most from this major investment, it is essential to be knowledgeable about the local market dynamics and the inventory of area homes. These figures play an instrumental role concerning how homes are priced. Before attempting to find a deal in the real estate industry, embark on the search armed with a solid idea of what is desired in a home, how much can be spent, and a neighborhood preference. Here is a basic breakdown of what to consider within the scope of two non-traditional types of housing purchases: foreclosures and short sales.

Homes Owned by Financial Institutions

Homes that are reclaimed by the bank are called foreclosure properties, and often, these homes are substantially discounted in efforts to get them sold quickly. Because banks have no desire to be homeowners, they will typically offer foreclosure properties at lower prices, but this may not be the only reason for the reduced price.

Consider that most homeowners that cannot afford to make their mortgage payments probably could not spare funds to make necessary repairs or provide proper maintenance for intrinsic home systems such as plumbing and HVAC systems. Before investing in this type of property, getting a professional home inspection to verify the integrity of the dwelling is worthwhile.

These inspections provide potential buyers with full disclosure of the condition of the home, while a bank’s disclosure may be limited because they did not actually live there. However, the results of an inspection lets buyers know what kind of repair expenses they will be looking at if the purchase the dwelling. Sometimes the repair expenses outweigh any expected financial benefits when buying a foreclosure property.

Short Sales : The Benefits and the Drawbacks

The process of purchasing a real estate short sale may provide significant savings to a buyer, and those with a good deal of patience and time concerning buying a home are good candidates for this type of sale. Even though government programs and lenders are actively attempting to speed up the approval and closure times of these sales, it may still take several months to receive a decision whether an offer is accepted or rejected.

Essentially, these deal are offered when a homeowner owes more on a property than its actual value, and many steps are involved in the process that contribute to the increase in waiting time. Often, these homes are often in better condition than foreclosure properties, as these homeowners have taken proactive steps to get above water financially, rather than allow the dwelling to go into foreclosure. These efforts are indicative of responsible home ownership; thus, the property is likely to be in better shape.

These options can provide bargain seekers with great deals when chosen carefully, and they are an excellent alternative to newly built dwellings or traditional home sales. However, do not be shy about trying to haggle with builders if a new home is desired, and many homeowners are reducing the pricing on their abodes due to the current economy issues, and there are deals out there to be had all around.