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           Buying a short sale home or a foreclosed home

Buying a short sale home or a foreclosed home is not just like buying a traditional home. Buying such homes – short sale or foreclosed can have their own risks attached to it but can also be rewarding enough. In case of a short sale home, you will be required to provide proof of funds letter if you are going to pay in cash. However, if you are going to take out a mortgage to buy the short sale home, you will need a pre-approval letter from the lender. So, there are various complex things that you will have to go through in order to buy a short sale or a foreclosed home.

Buying a short sale home

Some of the things that you will have to consider before buying a short sale home are:

1.     Details of what is owned on the home – You will have to find out the number of mortgages that are there on the home, the amount owed on the home and who the lenders are. You can discuss such things with your agent and decide if to buy the house or not.

2.     Qualifications of the seller – Get the details of the qualifications or package of the seller. In general, a complete package of short sale will have things like the tax returns, bank statements, sellers' hardship letter, W-2s, financial statement, payroll stubs. So, find out if the seller is ready with these documents otherwise the purchase can be delayed.

3.     Track record of the listing agent – An agent trying to advertise a short sale but haven’t closed one can be risky.

So, here are some of the important things that you will be require to do before actually buying over a short sale home.

Buying a foreclosed home

In order to buy a foreclosed home the things that you will be required to follow are:

1.     Inspect the foreclosed property – Before zeroing in on a particular foreclosed home, inspect different foreclosed properties to decide on a good one. You will be required to check with the condition of the house too.

2.     Look for pre-approval – In order to buy a foreclosed home, it is really important to get pre-approval for the mortgage if you are financing the home.

3.     Take out right type of mortgage – In order to buy the foreclosed property, obtain the right kind of home loan as per your requirements and your affordability.

So, while trying to buy either a short sale home or a foreclosed home, you will be required to follow these steps so as to avoid making any mistake.