Buying a Lehigh Valley Foreclosure Home vs a Short Sale Home

  
In general, buying a Lehigh Valley Foreclosure Home is a much cleaner/faster process than a Short Sale.

You make an offer on a foreclosure and the bank accepts it, counters it, or rejects it. Once the offer is accepted, you are fully under contract to purchase your Lehigh Valley Home and if the inspections and mortgage go well you eventually move-in.

The time from the bank accepting the offer to closing on the home is typically around 1.5 months (at least in PA). Foreclososure properties usually include an addendum from the mortgage provider stating that they accept your offer and here are THEIR terms (being sold as-is, must close within 30 days...etc) 

From when you submit the offer until you hear whether or not the bank accepts it may take 1 day, a few days, or a few weeks. Each lender is different but most reply in an acceptable time. The listing agent should have some idea on a reply time. 

With a Foreclosure Property, the bank already owns the house. They don't want to own real estate and usually want to unload it (although that doesn't mean they will accept an unrealistic price). The bank typically gets a BPO (broker price opinion) or appraisal to determine the approximate worth of the property.

With a Lehigh Valley Short Sale the home owner still owns the home. They may or may not be paying the mortgage. The mortgage companies will look at each situation differently to determine whether or not there is a hardship that justifies the "Short Sale". The bank is being "Shorted" the money they are owed. They want to know Why?

Typical reasons for a Short Sale:

• Job Loss
• Divorce or Break-up of owners
• Medical Emergency

When a Lehigh Valley Home Buyer wishes to make an offer on a Short Sale, the offer is presented to the seller of the home. Since the home seller will not be making any money on the purchase, they are likely to accept an offer that may not get accepted by the bank. On the other hand, the closer the offer is to what they owe on the house the better likely hood for a successful sale. 

Once the home seller accepts the offer, it goes over to the bank to get approved. The process of the bank reviewing and either accepting, countering, or rejecting the offer is the painful part. It may take months of waiting without any indication that the bank has even looked at the offer. The term no news today is very common. In the meantime, the listing agent may continue to market the property to accept a better offer or a backup offer.

So, a home buyer may wait months without hearing a word about their offer. This is very discouraging to many home buyers. This year I worked with 4 home buyers on short sales that never closed. In each situation, the bank was given 4-6 months to give a reply on their offer. Each of the buyers moved on to another house (2 went on to purchase foreclosures) after giving the bank ample time to reply to their offer.

The term Short Sale is deceiving because it may take months to get an approval from the bank that the offer has been accepted. 

Regardless of a Foreclosure or a Short Sale Property, a Lehigh Valley Home Buyer may end up with a really good deal pursuing one of these properties. Unfortunately, there is no set roadmap since each situation is unique.

With a Foreclosure, there is no longer any involvement with the original home owners so a VERY time consuming step in the process has been removed. With a Short Sale, the home owner is motivated to sell the home before it goes into foreclosure so the home may be in better condition.  

Each property needs to be looked at with these thoughts in mind.