Face it… Everyone wants a deal and when you are purchasing a new home, there is the perception of getting a really screaming deal if you can snag a short sale, or even a foreclosure. I understand the thought process here and I’ve had several really good deals close over the past year that have been short sales, but unfortunately, I have seen the reality of these deals too, and most of the time you have to be really cautious about how you approach the transaction.
In the past 6 months I’ve had three very interesting transactions that involved short sales vaporize after spending as much as 9 months leaving the buyers high and dry having to start all over looking at homes. I’m not going to bore you with a blow by blow description of the process, but I will tell you that each of these sales blew up because of an unforeseen circumstance that affected the sale. Two of the deals fell apart because the properties were flooded when pipes broke, even though the properties were winterized, and the third deal fell apart because of an administrative error on the part of the lender that allowed the property to slip into foreclosure at the last minute, leaving the buyers to find new properties after waiting for their “deal” to happen.
They endured months of camping out in rental properties while living out of boxes and suitcases and still had to turn to the retail housing market to find their replacement homes. In each case here, the buyers found a better home, at a really good price and were able to close their transaction without incident. Why? Because the homes were occupied by sellers that were motivated to sell their homes and were there to take care of business.
There is no real moral to this story, except that every day there are deals to be had in both the resale, and the distressed property markets. The reality of the sale is determined by what the market is doing on any given day. Supplies of resale homes reaching the market have stabilized leaving much better values to be found, and lenders, with all of their built in bureaucracy, are not giving the deals that they were back when they were over supplied with homes and new policies have slowed the flow of distressed homes reaching the market, once again adding stability.
My professional opinion of the current market is simple. If you are set on trying to get a distressed property, you must be prepared to change course at a moment’s notice, and have your bags packed for a long process to get your deal closed. On the other hand, I think the best values right now are found in the resale market because these people are motivated, and their homes are not tied up in the bureaucratic process. Deals can be found anywhere, but you really have to do your homework and be prepared to change course. Remember, for every house you like, there will be homework involved to make sure it is the “right” one for you.
As a professional Realtor®, I’m here to help you with your real estate needs. If you find this article helpful, and you would like more information, please give me a call at 303-798-8700.