Home sales usually fall into one of three main categories: traditional sales, short sales, and foreclosures. For buyers, each has pros and cons, though generally speaking the cheaper properties are short sales and foreclosures. But if you’re a buyer, you need to keep in mind that these properties are usually cheaper for a good reason. The best route for you depends on your financial situation and your goals, especially whether you’re buying the property live in or as an investment. Let’s take a look, then, at traditional sales vs. short sales and foreclosures in Poughkeepsie, NY.
Traditional Sales
This is what first comes to mind for most of us. Traditional sales involve a seller and a buyer who agree on a specific price for the property, and the transaction proceeds through the standard channels of listing, showing, and negotiating. In a traditional sale, the seller has the freedom to choose when to sell, for how much, and under what terms, without external pressures like those that exist in foreclosure or short sale situations. In contrast, short sales and foreclosures in Poughkeepsie, NY occur when homeowners are struggling financially, often due to missed mortgage payments, and are forced to sell their property under more stressful conditions. In these situations, the lender may intervene, either by approving a short sale or by taking legal action to initiate foreclosure proceedings, leaving the homeowner with fewer options and more complex negotiations than in a typical home sale.
Short Sales
With short sales, the money from the sale isn’t enough to fully cover the amount owed on the property, hence the term “short.” Because the seller has to get the lender to approve the sale price, there is nothing short about the amount of time a short sale takes. What a short sale does is allow the seller to avoid foreclosure. For buyers who are willing to wait after making an offer, short sales can yield some good deals.
Foreclosures
If a homeowner fails to make mortgage payments, the lender can issue a foreclosure notice, which states that the property will go into foreclosure after 90 days. If the payments aren’t brought current or payment arrangement isn’t made, the property goes to auction where individuals and companies can bid on it (usually with a set minimum bid). Often, the lender will take the property back with the intention of reselling it.
Typically, foreclosures are great for buyers looking for good deals, but the complexities of the transaction can be pretty daunting. In fact, it can get downright ugly at times because people are being forced to give up their home. Owners are sometimes forced into foreclosure sales owing to things completely out of their control like an extended illness, job loss, or divorce.
Foreclosure can be painful for the homeowner, but good news for the deal-hunting buyer. The bright spot for sellers is that they can exclude canceled debt from their income tax returns, and they no longer have to make mortgage payments. The entire process can take several months, and the house is theirs until everything is finalized.
Observations About Short Sales and Foreclosures
Short sales in Poughkeepsie, NY typically take a lot longer to close than traditional sales, requiring complex documentation and extended back-and-forth between the seller and lender. The process often involves submitting an offer to the lender, who must approve it before the deal can move forward—this can be a lengthy process as the lender is agreeing to take a financial loss. If your offer is not accepted, you will need to start over, further prolonging the process. On average, short sales can take anywhere from three to six months to close, whereas foreclosures generally close much faster, typically within 30 to 45 days of an accepted offer. It’s important to be prepared for the waiting period and the potential uncertainty that comes with a short sale.
Another aspect to consider is that short sale and foreclosure properties in Poughkeepsie, NY are often vacant for extended periods, which can lead to neglect and disrepair. In many cases, these properties are sold as-is, meaning the buyer is responsible for any necessary repairs or improvements. While this can be a drawback, it also presents an opportunity for buyers who are willing to invest time and money into fixing up the property. With some work, you may be able to secure a property at a significantly lower price than a traditional sale. However, it’s essential to assess the property’s condition and determine if the investment required aligns with your goals. Ultimately, deciding between traditional sales, short sales, or foreclosures comes down to your priorities—whether you’re looking for a quick move-in-ready home or are prepared to take on a distressed property at a lower price. A qualified real estate professional can help guide you through this decision and assist with navigating the intricacies of each option. Call us today at (845) 490-5694!
Interested in Poughkeepsie, NY short sales or foreclosures? We can help! Contact us today for more information! (845) 490-5694