Are there any particular requirements for me to purchase a Foreclosure or Short Sale in Kansas City?

Are there any particular requirements for me to purchase a Foreclosure or Short Sale in Kansas City?

This is part of a longer blog thread where we are talking about distressed sales in Kansas City, and more particularly in Johnson County Kansas, and what the differences are, and which one is right for you. You can read the first post on this topic here.

As with many things in life, buying a foreclosure deal in Johnson County also comes down to “The Benjamins” – Cash money, financing and/or a combination of both.

Foreclosures

There is a big push for the foreclosures on the market to be purchased by Owner Occupants – people who are going to live there. Many of the government backed foreclosures and or big banks have a special period that only owner occupants can bid on a property. HUD call this the “exclusive” period which varies in length of time but can usually be about 14 days, and Fannie Mae calls this the “First Look Initiative”. During this time, no investors are able to submit an offer, therefore reducing the competition for these deals.

Just because you want to buy a foreclosure, doesn’t mean you can! Lending requirements for different loans have different “condition” requirements. That means, if you can only qualify for an FHA or VA type loan, the house may be in too rough of shape for it to pass the lenders appraisal process. A really good lender can explain all the different loan types available and what you will qualify for, I’m not going to get into that. Important thing to note is to tell your lender that you are considering looking at foreclosures and which loans will work for you.

Short Sales

Depending on the condition of the property the same lending requirements may apply here as well. On of the very biggest requirements in purchasing a short sale is PATIENCE. It can take 77 to 120 days for a Short Sale to close. So be prepared to make an offer, have the seller sign it and then wait for up to 3 months before you even get a response from the bank. It doesn’t mean that people are not doing their jobs, the banks are just that overloaded.

So, are there any particular requirements for me to purchase a Foreclosure or Short Sale in Kansas City? Mainly your financing, whether you are going to live there or not and your time frame are your most important factors.

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What’s the Difference between a Short Sale and a Foreclosure?

What’s the Difference between a Short Sale and a Foreclosure?

This is a great question and we get asked this a lot.

This is one part of a longer blog thread where we are talking about distressed sales in Kansas City, and more particularly Johnson County Kansas and what the differences are and which one is right for you. You can read the first post on this topic here.

So back to the main question.

What the heck is the difference between a short sale and a foreclosure?

There are two main differences and they all have to do with where in the foreclosure process a property or owner happens to be.

So what is a foreclosure?

A foreclosure is a listing that is being sold by a bank or other entity that has taken back a home that went into default and was unsuccessfully sold at the foreclosure auction. It is vacant and can be in many different level is disrepair. Sometimes these are called “REO’s”. According to Wikipedia, “The term REO originates from the term Other Real Estate Owned (OREO), which is used on financial statements to classify real estate property owned by financial institution but which are not directly related to its business.” Generally foreclosures are much easier to purchase and can close fairly quickly 10-20 days depending on the lender.

So what the heck is a “Short Sale”?

In short (no pun intended) a short sale is an attempt for a seller to sell a home for less than they owe(selling it “short”) on their mortgage balance in lieu of going into foreclosure.

Why would a bank want to do something like this? Why would any bank agree to sell for less than what is owed? Great question! Foreclosures are expensive and banks are in the business of lending money and not owning homes. If a seller is not able to make payments and the house can only sell for a certain amount of money, then the bank may actually save money by accepting a short sale than going all the way to foreclosure.

We will get into this in a later post, but there is nothing quick about short sales and the can take 77-140 days to close. Yikes!

If you want to find out more you can reach out to us and we will be happy to sit down with you and discuss your options. Also, if you know of someone who is behind on their payments and feels like their only option is foreclosure, then they need to talk to us right away. They have option that can greatly affect their future borrowing ability – they do not have to give up.

Till next time!

Buying Foreclosures and Short Sales in Kansas City and Johnson County – What’s the deal?

Buying Foreclosures and Short Sales in Kansas City and Johnson County KS can be a very  good opportunity for any buyer, and especially in a buyer’s market you can get a two for one value. So what’s the deal? Is there a deal? How do I find them? How do I buy them?

Do you know what you are getting into?

Make sure you know what you are buying before you get too excited about a possible deal.

Great questions! Lets look at a couple key points that I am going to discuss in detail in future blog posts.

  • What is the difference between a Foreclosure and a Short Sale?
  • Where can I find Foreclosures and Short Sales in Kansas City?
  • Are there any particular requirements for me to purchase a Foreclosure or Short Sale?
  • Are Foreclosures or Short Sales right for me?

What is the difference between a Foreclosure and a Short Sale?

There are huge differences and while both can be a great opportunity, It’s important to know what you are getting into. Especially if you have a very strict time deadline. You will find out the “Short Sale” does not mean “Quick Sale”. We will go into that in more detail in our next post.

Where can I find Foreclosures and Short Sales in Kansas City?

You have started at the right place! With Me! DO NOT GO OUT AND PAY FOR A LIST! Just subscribe to this blog or our Facebook Fan Page to get the info hot off the presses.

Are there any particular requirements for me to purchase a Foreclosure or Short Sale?

Yes, depending on if you are going to rent or live, or finance or pay cash.

Are Foreclosures or Short Sales right for me?

We will discuss things like timeline, type of financing, how handy are you? Do you have a little pile of cash to make repairs and make double your money? Are you patient and can wait for the right deal?

Stay Tuned! If you cant wait for the next post, just email me or contract us here.