SHORT SALES
A short sale is a property that is usually in the process of foreclosure, with the seller still the owner. The home may or may not be vacant. In short, the seller is trying to sell the house for less than what they owe to the bank on their loan. You may find homes offered at unbelievable bargain prices. Of course the bank must approve this price, and they often don’t.

The bank approval process can take days, weeks, or months to get you an answer after your offer is presented.

Another snag that can come up is often there is not just one bank that has to agree to the short sale price. There can be many lien holders that must agree to basically give up their interest in the property. This includes 2nd mortgages, securitized asset holders (Fannie Mae or Freddie Mac) and even private mortgage insurance companies. Getting all those people to agree is very tricky and time consuming. Closing on time, or actually closing at all, is always questionable. It’s a frustrating process in most cases and unless you have a very flexible move date and a lot of patience, you might want to steer clear of short sales.

Finding the right home starts with a great search tool Saint Paul / Minneapolis (Twin Cities) MLS Only

FORECLOSURES
Once a house has been foreclosed on, it is a much simpler process. There is only one bank and all other liens have been wiped out. A new strategy that has recently emerged is banks pricing foreclosures at super low prices. This seems to be working in their favor because they get so many more showings it generates multiple offers. Many homes are selling quickly with multiple offers, and over the banks asking price.

There are many things to think about when buying a foreclosure. For instance, how long has the house been sitting vacant? In most cases it will be several months, sometimes a year or more. A Minnesota and Wisconsin winters can be very hard on a vacant house. Many are not heated and the utilities have been shut off for a long time.

When it comes to short sales and foreclosures, an experienced loan officer, real estate agent, and home inspector is critical to make sure you are not buying a money pit!