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Buying Short Sales or Foreclosures?

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By : Sonia Smith    99 or more times read
Foreclosure has become widespread across the States these days. This led to many families losing their homes, particularly if this is the only home they have. An option to foreclosure is a short sale, which does not save the house from being sold but shortens the process to lower emotional stress that a foreclosure could bring. With the economic crunch, some families opt to lave their homes before the foreclosure process begins. If properly done, an owner could use a short sale to secure financial future and sell the home that he or she cannot afford anymore. When you are considering buying a foreclosed home, it is important that you get a better idea on what these two could bring.

Investing on a short sale home could provide you with plenty of returns so long as you have the finances to make your home buy in cash or pre-approved financing purchases quickly. Most owners sell their homes quickly less than itís worth hoping to get some of the equity on it so they can go ahead with a different purchase.

If you are an investor, you will be able to maximize your investing dollar through a research and find out how much percentage of the loan forgiveness the mortgage of the homeowner was willing to commit to. Upon negotiating your home offer with the home seller, the lower you can get the price, the more money could probably make out of this short sale transaction.

If you do not want to deal with a homeowner, then a foreclosure purchase could be the right option for you. A foreclosed home will be priced lower than a short sale home and most probably you do not have to deal with the present homeowner and you will only have to negotiate during the property auction. Nevertheless, the downside to a foreclosure investment is that most of the foreclosed homes are in desperate need of repairs and in come cases, homeowners will purposely vandalize these homes before they are evicted. Another important thing that you should take into consideration is when you invest in this kind of home; it requires you to buy in cash.

The financing type that you have could automatically lend itself to the type of investing that you can do. It is hard to buy a foreclosure home if you d not have cash on hand. Nonetheless, if financing is not an issue, it will be necessary to do an analysis of each property for the possible profit based on repairs, purchase price, rental or sale income that you can expect to get from it.

Purchasing a foreclosed home allows you to get maximum profit and could be the best investment for you. For maximum stability in a home buy, short sales give you the most information regarding a home to be able to make an informed and sound decision before you purchase. Most real estate investors are finding good residual income could be achieve by renting out the foreclosed or short sale homes since the real estate buying market is likely to be so volatile during economically difficult times.
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