Short Sales Make Better Investments than Foreclosures?

Short sales can certainly make for better investment properties than foreclosures. There are a few reasons:

1. Short sale sellers are considered responsible for doing the right thing. By not walking away from the property and just handing the keys back to the bank they show a sense of responsibility. This almost always translates to a better taken care of and much more well-kept home.

2. Short sales are better regulated by the real estate industry — Although short sales are usually sold As-Is, chances are someone was living in it just recently. The walls, trim, doors, windows, flooring, etc are almost always in good condition and most of the appliances are probably working and still in place. Compare that to a fully stripped foreclosure that could cost tens of thousands of dollars to bring back up to livable condition.

3. Value — Foreclosures drive down neighborhood values drastically. Short sales help keep neighborhoods valued correctly and don’t drive down pricing as quickly.

4. Short sales can be bought without overpriced bidding wars — Usually in a short sale the seller only accepts one solid contract from a buyer. That means that any buyer with a good offer and solid credentials has the chance to put the property under contract. In a foreclosure you could end up bidding against 20 or 30 other people, thereby driving the price up and then the end buyer ends up buying an overpriced property in a sale frenzy.

5. Short sales offer inspection periods and better due diligence — In a short sale you can usually obtain sellers property disclosure statements, insurance claims history, you have time to do a full property inspection before purchase, and you can sometimes ask for repairs. Try doing any of that with a foreclosure!!

Short sales and foreclosures can both make for good investments but you really need to do your homework and make sure you have a good real estate expert helping you. Just because a property is a short sale or a foreclosure does NOT necessarily make it a great deal!

Short sales generally sell for higher prices than foreclosures but from an investment standpoint you are paying for probably a better kept property that needs less repairs, has a good seller history, and is one that you may only need minimal maintenance on to rent it or sell it at a later date for a profit.

We specialize in short sales and pre-foreclosure properties and whether you are an upside-down seller looking to get out from your underwater home or if you are an investor or home buyer looking for a good deal on a nice property we’d love to help!

Please call us at 480-241-4406 or email us today at Sean@AzHomeHelp.com.

Related posts:

1. Short Sales & Foreclosures — Looking past the distressed market…
2. Short Sales Help Neighborhoods Recover
3. Real Estate Short Sales – Scottsdale Az
4. Short Sales – What’s negotiable?
5. Fannie Mae Cracking down on Foreclosures!!