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Short Sales Pre Foreclosure Article
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Considerations For A Pre Foreclosure Sale
from:A pre foreclosure sale is most commonly referred to as a "short sale" since the seller is going to have to sell their house or property "short" of the actual market value. Since the seller already knows that they will be getting less out of the house than they put in, maximizing their return on the pre foreclosure sale is key as this decreased the amount they will need to borrow or continue to pay on the balance of the mortgage. In cases where the owner is not able to sell the home prior to the foreclosure, they will lose the house and property and will take a significant hit to their credit score as well as there ability to obtain a home loan, or any other type of loan, well into the future.
Since a foreclosure is so negative, most homeowners that cannot refinance or work with their lender to catch up on defaulted payments and set up an appropriate program of repayment for the future often choose the option of a pre foreclosure sale. As an investor it is critical to consider all option of the pre foreclosure sale as there can be hidden costs, fees and significant upgrades required to the property before it can be resold. Even if a house is purchased for thousands of dollars below market value if it needs thousands of dollars of upgrades it is not a bargain.
Unfortunately many first time investors get caught up in the hype and marketing that many pre foreclosure sale companies and marketing agencies promote. Buying a house in a depressed housing market, even at a bargain price, doesn't make sense if you can't rent it out or sell it for more than you bought it for. In cases where there is a depressed real estate market, buying only makes sense if you have the ability to pay the mortgage yourself or if you intend to live in the house and make the payment. Buying a house assuming that the pre foreclosure sale low price will mean that you can somehow sell it for more in the same market is not realistic, although many agents and marketing companies will not present this information.
If you are considering a pre foreclosure sale property, first start by seriously looking at your financial status. If you can afford to purchase the house without putting yourself at risk, then answer the following questions:
• Could you afford the mortgage payment if the property did not rent or sell?
• How much money would be needed to complete the upgrades to make the house more attractive on the market?
• Does the location warrant the upgrades in your return? Older neighborhoods or neighborhoods in transaction are often poor investments.
• What are the overal comparable sales figures for similar houses in the area?
Knowing the pros and cons of purchasing a pre foreclosure sale property are important for your financial future.
Short Sales Pre Foreclosure News
Some Lenders Paying Borrowers Thousands to Short Sell Their Homes - Mortgage Rates & Trends (blog)
 Mortgage Rates & Trends (blog) | Some Lenders Paying Borrowers Thousands to Short Sell Their Homes Mortgage Rates & Trends (blog) Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller's outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, ... Banks Realize Short Sales Are Better Than Foreclosure, Pay Homeowners To Sell Now |
Vail Daily column: More on the Making Home Affordable Act - Vail Daily News
Vail Daily column: More on the Making Home Affordable Act Vail Daily News If you can't afford your mortgage and it's time to transition to more affordable housing, the Home Affordable Foreclosure Alternatives program may be just the ticket. HAFA provides two options for transitioning out of your mortgage: a short sale or a ... |
Banks' brilliant idea to give cash incentives to short sale - AGBeat
Banks' brilliant idea to give cash incentives to short sale AGBeat According to Bloomberg, banks are looking at ways to shorten the process and clear the foreclosure backlog by putting less foreclosures onto their books. Some banks are now pre-approving short sales and even offering cash incentives for borrowers to ... |
One-fifth of home sales in third quarter of 2011 were foreclosures - St. Louis Beacon
 Chicago Tribune | One-fifth of home sales in third quarter of 2011 were foreclosures St. Louis Beacon By Mary Delach Leonard, Beacon staff Homes in foreclosure or pre-foreclosure accounted for one-fifth of all US residential sales in the third quarter of 2011, an indication that the pipeline of distressed properties is continuing to flow into the ... Foreclosure Properties Decline to 20% of Home Purchases in US Foreclosure Homes Account for 20 Percent of All US Residential Sales in Q3 ... Report: Area offered steep discounts on foreclosures in 2011 |
Volusia, Flagler coasts fare better in foreclosures - Daytona Beach News-Journal
Volusia, Flagler coasts fare better in foreclosures Daytona Beach News-Journal Single-family homes and condominiums listed for sale in inland cities show a much higher rate of pre-foreclosure and foreclosure activity. A look: A sampling of 2011 properties with foreclosure filings, by ZIP code, show a discrepancy of the top four ... |