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Which to buy: short sale or foreclosure?

Benefits of buying short sales
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Benefits of buying short sales

Looking for a foreclosure-home price but in better condition? Sift through short sales in your local market, Daubenmeyer says. A short sale is still owned by the homeowner, who owes more on the mortgage than the home is worth.

"The short sale is, in my opinion, far better than buying a foreclosure because the home is generally in better condition because it's been occupied," she says. "The utilities have been maintained, usually the lawn is maintained, those kinds of things."

In April, the median price of a short sale home was $218,500. By comparison, a nondistressed property's median price was about $267,300, according to Re/Max.

Short sales often take a notoriously long time to close. Enter the federal Home Affordable Foreclosure Alternatives program, or HAFA, which helps the buyer and seller by speeding up the short sale process. "It's not perfect by any means," Daubenmeyer says. "But it has created a timeline that we can hold the mortgage lenders accountable."

She recalls recently closing a short sale deal in 58 days through HAFA, and she knows other certified distressed property experts who have been able to close in 30 days or less.

If possible, she says, work with a seller through the HAFA program to speed up the closing process.


 

 

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