What is the better Michigan home to put a bid in on? A Michigan foreclosure or a Michigan short sale?
So you are looking through listings of Metro Detroit real estate and you have found two homes. One is a Michigan short sale and the other is a Michigan foreclosure. Whats the difference and which would be more likely to take a lower offer?
Here are the differences:
Michigan foreclosure Owned by the bank Bank makes decision Bank want to get it sold Bank makes the decision within 2-4 days
Michigan short sale Still owned by homeowner Bank & home owner make decision with bank having final approval Bank sometimes doesnt approve short sale Bank sometimes takes weeks (up to 6-7 weeks) to make a decision.
A Michigan short sale is a home owner trying to sell the house. The problem is that the homeowner owes more on the house than it is worth. The house may only be worth $170,000 in this 2008 Metro Detroit real estate market but they may owe $200,000 on the mortgage. The bank has to approve that $30,000 loss. The bank has to think the loss is acceptable. Many times the bank will not approve a low offer. Many times the short sale will not go through. The house then goes into foreclosure and the bank ends up selling it for less than the short sale offer. I have heard of offers of $800,000 being turned down and then the bank having to list the Michigan foreclosure for $650,000.
Remember you have some bank person hundreds or thousands of miles away trying to make a decision on how much the bank can lose. It is his job on the line. They very rarely get the short sale right.
Also some people are putting up homes for short sale just to buy time. They may be behind in payments and this is a way of staying in the home for a longer period of time without paying rent or the mortgage payment. Some homeowners dont care if they sell or not in a short sale. They have nothing to lose.
The bottom line is that you will most likely get a better deal buying a Michigan foreclosure than you would buying a Michigan home that is a short sale. If you are in a rush, or have no patience a short sale is not for you. It may be weeks without an answer with a short sale. Many short sale offers never get accepted.
For your Metro Detroit foreclosure list email me at info@RussRavary.com or click on the Search for homes button above to search all the Michigan homes for sale. For more real estate information go to www.RussRavary.com if you cant find it on this website.
Have a great day! Russ Ravary
Here is my thought of the day:
’ One who creates the opportunity is Brilliant. One who gets the opportunity is Lucky. One who capitalizes on the opportunity is the Winner.’