It is already a trend for Australian investors to heavily invest in the US housing market. But regardless of the fact that properties are priced lower, and that banks offer lower interest rates, all investors ask same questions – Will purchasing a foreclosure homes USA or short sale end in disaster or produce a jackpot? Which option will be best for me? There is no exact answer to these questions. It all depends on you as a buyer and your priorities as well. Before starting your research process, you should check the drawbacks and the benefits of buying short sales and foreclosures.
Benefits Of Buying Foreclosures USA – According to some studies, around 2.2 million homes in the USA were in foreclosure in April 2011, and this trend continues today. On average, they are sold for nearly 30% less than a non-distressed property. In April, 2011 the price for a move-in ready foreclosure homes USA was $185,000, while the price for a non-distressed home was around $267,300. Such price differences are possible just because home buyers can negotiate the price in foreclosure sales. Purchasing a foreclosure is usually much faster than purchasing a short sale. An average foreclosure home that needs some repair may cost nearly $107,600. After fixing it up, you can resell or rent. You can expect to spend no more than 5 to 10% of the buying price on renovations.
Drawbacks Of Buying Foreclosure Home – Are you sure about the idea of purchasing a foreclosure homes USA? Do not rush. Proceed with caution because there is likely a hidden cost to that low price – a damaged home. As a buyer, you could encounter scarred walls, appliances or carpets that were damaged by the previous owner. Turned-off utilities in addition with the home sitting empty for long time can do a great share of harm. If you are handy and have a high level of tolerance for defects, you may consider buying the house. But still, in some foreclosures, the house condition may be the smallest problem. If you purchase a foreclosure home at auction, you would not get the chance to see whether the walls are cracked, or whether the plumbing works well. You will be responsible for all legal and cosmetic issues.
Benefits Of Buying Short Sale – Looking for a foreclosures USA home in good condition? Consider the short sales. A short sale is still owned by the homeowner who owes more on the mortgage than the home is worth. The short sale is maybe a better option than a foreclosure just because the home is usually in better condition. Short sale homes usually take a long time to close. Because of this, there is a special program which helps the seller and the buyer by speeding up the short sale process.
Drawbacks Of Buying Short Sale – The name ‘short sale’ can be wrongly interpreted – these deals can take months to close. You have to qualify for a short sale. Once a seller is approved, the first question you should ask is whether there are two mortgages on the home. If there is a second mortgage, the transaction can become difficult. Each person that has made financial investment in the home has to agree to the short sale. In the meantime, you will be stuck waiting for the answer. You will need to know when to fold and when to hold.
Know What You Want – Nothing in the real estate market is 100% sure, but you can get a great deal if you know exactly what you are looking for. If you need a home within one or two months, the foreclosure homes USA are good option. If you have more time on your hands, short sale homes could be your best option. Determine whether you have the money and time to repair the home. You can make a great deal with either a well maintained foreclosure or short sale, but you must hire a good real estate agent to handle the buying process.