Is a foreclosure or short sale right for you?

The answer to this question depends on you - your skills, your knowledge of home repair, your financing, your timeframe, and your patience - as well as the condition of the property or properties that interest you.

Many (but not all) REOs and short sale properties have been poorly maintained, and it may involve a lot of time and money to fix the property to your standards. If you are skilled in fixing up homes and have the resources to do so, a low-priced property in poor condition might be the perfect property for you, whether or not it's an REO, short sale, or a regular listing.

Regarding REOs specifically, are you able and willing to investigate the property and secure a home loan in a short time period? Call Scott at 707.937.6161 if you would like to discuss your situation in this regard. Financing is extremely important, and unless you have cash for the purchase, before you write an offer you must be preapproved by a lender to get a purchase loan. We can find out for you which lender the bank prefers, or we can recommend several lenders in town who have repeatedly done outstanding work helping our clients get home loans in a timely fashion. (We don't receive any compensation for recommending these lenders; we simply like to recommend professionals who continually exceed our expectations!)

Regarding short sales, you will need time and patience to wait for the seller's lender(s) to approve the short payoff. While everyone is waiting to hear back from the lender, two things can happen: 1) the lender can take so long to respond that the foreclosure process is completed before a short sale is approved (although rare, it happens!), and 2) another buyer might also submit an offer while you are waiting. There is a good chance the purchase will go through, but since there is no guarantee it's best to be somewhat detached about the outcome. Short sales work well for investors who could purchase any one of several properties as long as the price is right, or for anyone who doesn't mind the wait and suspense in order to get a good deal. If you are someone who falls in love with houses and can't wait to live in particular home that is listed as a short sale, you might be in for an emotional roller coaster ride. Not all short sales are created equal and it's important to research the particulars of that sale before writing an offer. Scott can investigate each short sale you're interested in and tell you which ones are more likely to result in a closed sale - and a great bargain for you!

Regarding loans, some buyers may qualify to purchase an REO property with as little as 5% down using an FHA loan, and there are also additional loan programs available with just 10% down. Rates for a 30-year fixed rate mortgage are still quite low, and some buyers are finding that home ownership in Mendocino is more affordable than it has been in years and sometimes not that much more than rent! Contact Scott now to talk about how the loan process works and if you might be able to buy!