Short Sales or Foreclosures
Foreclosure has become rampant in the country these days. This brings misfortune to many families, particularly those whose homes are the only ones that they have. An option for foreclosure is a short sale, which does not save the home from being sold but shortens the process to lessen emotional strain that a foreclosure brings. With the economy fluctuating, some families opt to leave their homes before the foreclosure begins. If properly done, a homeowner can use a short sale to secure a financial future and sell the home he or she could no longer afford. When considering short sale homes or foreclosure, it is of vital importance that you have a wide idea of what these two could bring.
Investing in a short sale home could give you huge returns provided you have the finances in place to make your home purchase in cash or pre-approved financing purchases quickly. Most homeowners often sell their homes for less than it is worth in the hope of quickly getting some equity of the property so they can proceed to a different purchase.
As an investor, you will be able to maximize your investing dollar by making a research to find out how much percent of the loan forgiveness the homeowner’s mortgage has been willing to commit to. When you negotiate your offer with the homeowner, the lower you can get the price, the more money you can potentially make from the short sale transaction.
If you do not like to deal with a homeowner, then a foreclosure purchase is for you. A property in foreclosure will be available at a lower price compared to a short sale, you will not likely have to deal with the present homeowner, and the only negotiation you have to make is during the property auction. The downside of investing in a foreclosure is that most of these homes are in desperate need for repairs and there are times when the homeowner will purposely vandalize these homes before they are evicted. The other vital thing to remember is when investing in this kind of home requires cash.
The kind of financing that you have could automatically lend itself to the type of investing you can do. It is hard to buy a foreclosure home if you do not have cash on hand. Nevertheless, if financing is not an issue, it will be necessary to analyze every property for the potential profit based on the price of purchase, repairs, rental or sale income you can expect to get from the home.
To get maximum profit, foreclosure buying is the best investment. For maximum stability in a property purchase, short sales provide the most information regarding a property to be able to make a good and informed decision before you purchase. Most real estate investors are finding a good residual income base can be made by renting out the short sale or foreclosed properties since the real estate purchasing market has a tendency to be so volatile in during economically difficult times.
