The Differences Between Foreclosures Short Sales And Traditional Sales In Real Estate
As you look at the many different listings for real estate in your area, you might wonder what type of property would be the best you own. You may have heard that foreclosures are one of the best ways to invest your money because you can get these properties at a substantial discount. However, some of the properties currently listed with a realtor could also provide you with a fantastic deal, especially if the owner wants to do a short sale. Let’s go over what all three of these have to offer, and then conclude on which one will probably be the best investment.
What Is A Short Sale Property?
A short sale is the sale of property for the exact amount that is owed. These people are typically almost to the point where their house is going to be foreclosed upon, and they want to prevent this from happening. Even though they will walk away from this when no money at all, you are helping them take care of the mortgage. You will be able to get the property for a very low amount, especially if there is a sizable amount of equity built into the property already.
What Is A Foreclosure?
A foreclosure is the other side of the short sale so to speak. This is where people have lost their property. It has gone back to the bank, and the bank will then sell it. The primary goal is to get some money back from this property. A bank needs to have liquid assets to function, and if all they have are hundreds of houses that are generating no revenue, this is a liability it can compromise the bank’s ability to properly function, and therefore they will sell these properties at a significant discount. You can find these at foreclosure sales, and if you are the winning bidder, you could purchase a property that could have tens of thousands of dollars of built-in equity right away. Although short sales and foreclosures are great ways to get fantastic deals, that doesn’t mean that traditional sales in real estate cannot bring a substantial profit.
Traditional Sales In Real Estate
By working with a realtor, you should be able to find many deals that are available. These will come from individuals that will lower the price that they are asking because no one is making an offer. These could be homes that are free and clear, or that have a very small mortgage. If you can purchase this for less than the market value, you will instantly have equity in that home which is going to provide you with an instant profit.
Which One Is The Best?
These ideas should help you find properties that are for sale which can be instantly equitable. Whether this is a short sale, foreclosure, or a regular property that you buy from a realtor, all of these can make you money. Just make sure that when you purchase a property through a realtor that you have done a comparable check on properties that have recently sold that are similar. This will help you decide whether or not this is going to be a good deal, and if it is, you need to complete the transaction.
Now that you have a better idea of how these different types of property sales work, you can start to look through all of them. Some businesses will show you the latest for sales that are currently available, and you can always work with a realtor to find short sales and regular properties. If you do have the ability to invest in real estate, it is something that you need to do. It’s a great way to make sure that you are moving forward toward a great retirement by obtaining discounted real estate.