With all of the area home sales that are Short Sales and with all of the Foreclosed homes on the market buyers in Manassas Virginia and the surrounding areas have a lot to think about.
First let’s start with making sure everyone understands the differences in these types of properties.
During a Short Sale the owner still owns the home and may or may not be occupying it at the time. The home value is higher then the total mortgages currently held on the property. The owner is trying to avoid foreclosure from the bank by receiving an offer to purchase. If the sale goes through the final approval is needed by the bank to accept the offer for less then the amount owed on the loan. It’s a bit more involved but you get the idea.
A Bank Owned home has already been foreclosed by the bank and was not purchased at auction. So the home now reverts back to ownership by the bank. Banks want to sell these as they are not in the business of owning homes.
So which is best to buy? Which one gets you the best deal? How flexible is your time line?
If you purchase a Short Sale property you MUST be prepared for two things. The first is that it may take 30-60 days, maybe longer for the bank to approve the sale. And the second thing is that when that 30 or 60 day decision arrives they may say ‘no’. If they say no you are out any expenses up until then and you have to start the home search again. Sure you will get your earnest deposit back but the cost for the home inspection, the appraisal or other inspections are gone. Now you need to start looking again. The challenge is putting an offer together that in the long run, the bank will like. The seller’s will almost accept anything sometimes which is good and bad. For you it seems good but when the bank finally reviews the offer if it is out of line with a) what they owe the bank and b) what the general market value is the bank is likely to say NO.
The good thing you are doing if this does go through is you are actually helping the sellers save themselves from an otherwise disastrous situation – foreclosure. A Short Sale has less impact on the seller’s credit rating and may help them to get themselves back on track that much sooner. And I have to say there is something nice in knowing that you got a great home, at a great price and where able to help someone else along the way.
Bank Owned homes are a great alternative but not always the great deal you might think so take your time. Banks, just like the original owners are looking for market value. They are trying to a) recover their losses and b) make up for some of those losses. If you are in a time crunch Bank Owned homes help you stay on track a bit better then a Short Sale. Both are often sold in AS-IS condition meaning ‘buyer beware’. Make certain to have a home inspection even if they sellers are stating AS-IS. Consult with your Realtor as you should be able to make an offer with using a Home Inspection as the right to ‘Void the Offer’. This would simply state that if you find things during the inspection, even if the owners will not correct them, you should have full rights to void the offer and get your earnest deposit back.
Everyone wants a great home at a steal of a price. They are out there but do your homework and you just might find just what you are looking for.
