If you’re looking to get into the housing market in the Naples area, one way to do that is by looking for short sales or foreclosures. These occasionally come up even in high-end areas and can be a golden opportunity to get into a seemingly prohibitive market.

However, purchasing a foreclosure or short sale home is more complicated than other sales, and there’s a lot to know before you start the process. For example, homes that have been foreclosed can be in bad shape, since a homeowner who couldn’t keep up with the mortgage payments likely couldn’t afford upkeep either. That’s why it’s important to go into the process with your eyes open to avoid any nasty surprises. We’ll help you decide whether a foreclosure or short sale is a good option for you.

Buying A Foreclosed Home

Foreclosure is what happens when a homeowner defaults on their mortgage payments. Homes that have been foreclosed can often be bought for much less than the going rate, making them an attractive option for people who are having some trouble breaking into the housing market.

Here in Florida, a lender has to initiate foreclosure by filing a lawsuit after the borrower defaults on the loan. This means that there is often a period of up to six months before the house is put up for public auction. This period is known as “preforeclosure” and is often the best time to purchase the home, since your offer won’t be affected by other bidders who are driving up the price. There are online databases where you can search for houses that are in preforeclosure, or you can consult with a realtor. Buying the house at this time is often ideal for the seller as well, since that means they won’t have to go through the whole foreclosure process.

The other option is to wait until the house has gone to public auction. However, at this time the competition might be fierce, and you’d most likely be bidding against the original lender as well as other prospective buyers. Additionally, there’s a chance that the house might be redeemed by the original owner or even the IRS if there is a tax lien on the property, so be aware of the possible pitfalls.

Purchasing A Short Sale Home

A short sale happens when a homeowner is “underwater,” meaning that the selling price for the house is lower than the amount left on the mortgage. Although this isn’t nearly as common as it was during the 2008 housing crisis, it does still happen from time to time if a lender decides that they have a better chance of recovering some of their investment through a short sale than they would by foreclosing.

These houses are often listed below market value in order to move them quickly, but buyer beware – they are always sold as-is, meaning that you won’t be able to make the sale contingent on inspection. Additionally, because the bank is in charge of the sale, the process usually takes several months to complete. That being said, it is possible to get a great deal on a house through a short sale, so it’s worth looking into as long as you understand the potential hazards.

Find A Great Deal With The Link Team

Whether you’re looking into foreclosures and short sales or you’re looking to purchase a home on the open market, the Link Team can find you the perfect SWFL home, especially in Naples, Bonita Sprints, Fort Myers, and Estero. To learn more about what we can do to find your dream home, call us today at (239) 357-5058 or get in touch through our website.