Tips to Purchasing Short Sale/Foreclosed Properties

The Tri-Cities area is ripe with excellent Foreclosure and Short Sale deals waiting to be snatched up. Short sales and foreclosures are great ways to get a deal on a house or condo, but you should know what to look for and what to look out for.

Short Sales occur when a lender allows a house to be sold for less than what is owed on the mortgage. In many cases, the bank will lose less money in a short sale transaction than letting the house go into foreclosure. Since the lender is responsible for approving the sale, it is important to make your offer as appealing as possible.

Get pre-approved with a qualified lender. A pre-approval letter is a MUST for short sales to prove you are serious about your purchase.

Don’t try and negotiate for repairs or ask for special reports on the house. It is best to buy the house “as is”.

Offering a deposit of 2 – 3% of the offer price is going to catch the bank’s eye a lot more.

Conventional loans or All Cash are the most appealing.

A large Down Payment makes an attractive offer.

It’s important to remain patient. Short Sales have to go through extra steps than a regular transaction, such as bank approval, so don’t get over anxious if it takes a couple of months before an answer is received. With Short Sales, the deal is never done until the papers are signed, so don’t be afraid to place an offer on several opportunities rather to focus on one specific property.

It is never out of the question to make offers on homes or condos that already have existing or even have already accepted offers. Many times the original offer will back out of the transaction due to several factors that may occur in the length of time from their original offer and the Short Sale approval.

Always remember that the best deals go first and if you see a good property, you should submit an offer ASAP.