Short Sales and Foreclosures, a good idea?

Many people think of these buzz words today as an opportunity to “get a deal,” or simply make some quick equity when looking to purchase a property.  However, contrary to what one may think, these types of transactions may be much more difficult than originally believed.  If you’re a first time buyer, you may want to consider these points….

~You need to have your financial ducks in a row.  Often times, when banks are dealing with distressed properties, they want the new buyer to be finiancally perfect on paper.  With lending laws tightening, when dealing with these types of properties, you need to have your credit in top shape, as well as a strong down payment.

~Be prepared to play the waiting game.  When making an offer on a foreclosure or short sale, be prepared to wait weeks even months for a response from the bank.  Depending on what stage the property is in, a bank may or may not be willing to jump on the first offer it recieves.

~Keep a little cash on hand.  While in Chicago, it is customary to move into a new place with all the appliances there and installed, with distressed properties, oftentimes, the appliances, window coverings, even light fixtures, have been removed and will need replacing.  In addition, the property could most likely need substantial renovating or repair.

~Bidding wars.  Banks will oftentimes underprice a house, or ask for what is owed, and this could result in multiple offers.  Just because you are paying more than the bank is asking, doesn’t mean you’re overpaying.  Have a good agent.  Know the market.  Sometimes paying a few dollars more, could mean you get the house, and instantly gain thousands in equity.

These are just a few things one should think about before moving forward with a foreclosure or short sale.  With the proper guidance, and patience, these types of transactions could be profitable.  To find out more about how to navigate through this ever changing market, contact your Real Estate experts at kjpremier@atproperties.com.