Monday, January 21, 2013

Weighing the Pros and Cons of Foreclosed and Short Sale Homes

Because of the escalating prices of real estate properties within the United States, a greater number of Americans now prefers renting to acquiring their own houses. In fact, recent statistics from the U.S. Census Bureau (2012) reported a decline in the number of homeowners throughout the country. From 69.2% in 2004, homeownership dropped to 65.9% during the second quarter of 2012.

For the majority of people who still opt to purchase and settle in their own abodes, however, many consider the cheaper and more affordable distressed houses than the newly built ones. At present, a significant number of homes listed for sale in the United States’ housing market are distressed properties, which are either foreclosures or short sale homes. Though both types of properties offer home buyers and investors great opportunities, venture capitalists and home buyers are often advised to understand the pros and cons before owning and investing on these types of assets.

Buy in Bargain Prices…

One of the obvious reasons why buyers are often drawn to distressed houses is the fact that they are able to buy a property for below market price. As CNN Money discloses, foreclosed properties may sell for a cut rate of between 20 and 40 percent off market value.

Smart Investment…

Buying a property for a below market price that require just few minor repairs will always be a great opportunity to save money; hence, any buyer can invest the saved money to other forms of venture.

Currently, the top states with the highest foreclosure rates are Florida with 12.1 percent, New Jersey (6.6 percent), and Illinois (5.4 percent). Meanwhile, both Nevada and New York trail on the fourth spot with 4.9 percent ratings (PropertyWire.com, 2012).

Though some buyers believe that purchasing foreclosed and short sale homes are far better than buying new ones, others see its major drawback as follows:

Requires Extra Time and Effort…

Buyers planning to purchase distressed houses are entering a transaction process that requires additional legwork and extensive documentation. With all the necessary documents to complete, buyers are obliged to exert more time and effort to complete the business deal.

Additional Help

Meanwhile, for those who are interested to invest on affordable distressed properties that are listed for resale across the country, visit ForeclosureMagic.com. It is a free site that offers a large database of wide range of affordable distressed and real-estate-owned properties, such as foreclosures and short sale homes.

To get free and up-to-date data and to ensure the best deal possible, visit http://www.foreclosuremagic.com/.


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Posted in Foreclosure, REO