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Is the process of buying a foreclosed home easier than a short sale process?

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September 16 2010 - New Bedford
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Yes, Yes, Yes!  Buying an REO is straight forward and simple.  A short sale can go on for months and communication is slow at best.

Simon Mills
Mills Realty
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September 16 2010

In a foreclosure sale, you will have addendums that the bank will require that will dilute your rights as a buyer, however you will be able to actually buy it and close.

A short sale is like gambling...you may get the property, you may not...the bank can change the price and terms up to the day of closing.

Erika in Orlando

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September 16 2010
When the bank has already foreclosed and now owns the property(REO) it is much easier to negotiate and much more likely that you will negotiate a good value. Equally import is that it is less likely that something will go wrong at the last minute for the bank to not allow the sale. 
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September 16 2010
T. Cabral.   Most of them are much easier than a short sale but that is not to say that things cannot happen that won't happen in a regular sale.   For one, the bank has a right to cancel the contract up to the minute that you close.   I've heard about it happening a few times.  And, you'll have to sign pages and pages of addendums to the contract that are very one sided in favor of the bank or REO.   It's kind of like, you pay their game or else.   You are dealing with a corporate person behind a desk working toward a goal in order to keep his job.   Emotion does not enter into any of it.  Most of them go pretty smoothly these days though.  Good luck.
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September 16 2010
Choose your poison (kidding).

Neither is as easy as a straight sale, but short sales are tougher. Given the market and the reach of information on the internet, neither short sales nor foreclosures are the great deal they once were. The days of $500K houses for $300K are few and far between...
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September 16 2010
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Yes. Should be fairly straigt forward. If buying a home that has been foreclosed, you will have a seller (the bank, mortg co, fannie/freddie/fha) that can negotiate and sell the home.

If you are buying a home that is a shortsale, the seller will need final permission from their lender or lenders in order to sell and close. Depending on the sellers lender (s) it could take a while for them to respond.

Then again the last client I worked with who was buying a home from fannie turned out that the auction never happened and the house had to go back through the auction process. Oops.
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September 16 2010

Sometimes a foreclosure is more easily closed.  But, if you work with an Agent who is savvy in handling short sales, and a Seller who has complied with their lender's requirements, a short sale can move along to closing quickly.

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September 16 2010
Notice that both these other answers are referring to buying REO rather than at the auction.
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September 16 2010
Buying a foreclosure is much easier than a short sale.  In a short sale, the seller must get approval from the bank not only for the short sale, but also the price that they will accept.  You can conduct home inspections and satisfy your desire for information about the property before you close.  Further complicating short sales are second mortgages with other banks that typically will be a "fly in the ointment" when trying to get approval. 

When a home is being sold as a foreclosed property, the bank is ready to negotiate because they do not want these foreclosures in their portfolios.  Vacant houses go down hill very quickly.  In a short sale, in most cases, the seller is allowed to stay until a buyer is found.  You do have to be careful with a foreclosure because it is being sold "as is."  You are stuck with what you get.

Brenda Feria
Real Living Eudailey Real Estate VA
Real Living at the Beach SC
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September 16 2010
Generally, yes. Short sales often require quite a few more steps. With a foreclosure you are still dealing with a bank and their policies (and perhaps additional investors), but there is at least one less step with each negotiation.
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September 16 2010
Depends on when you buy the foreclosed home.  It is much easier to buy an REO (Real Estate Owned) home than buying at the "auction".  There is a lot of risk for auction buying; you really need lots of experience, and to have thoroughly reviewed the property and records ahead of time.  You also need to have the money ready to pay right then.  But if the lender did not get an offer sufficient to meet their need at the auction, the lender ends up buying back the property instead of selling it for too little.  The property is then REO.  It then is at the discretion of the lender if they want to put it on the market, and if they want to do any improvements to it prior to putting it on the market.  But an REO would go through a normal sales process and normal escrow, unlike a short sale that can be dragged on for months as the lenders try to decide whether it is worth it for them to take a loss, and how much loss they are willing to take (especially if there is a second loan, as the second usually loses everything, or close to everything).  In the "short sale", the lender is always thinking maybe the owner will keep making the payments...  thus 6 months for even an answer if an offer is accepted is not unusual.
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September 16 2010
 
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