Buying Michigan Short Sales Versus Property Foreclosures: What Type Should You Purchase?

Whether you’re looking to buy a personal home in Grand Rapids, MI or just looking to invest in the local West Michigan real estate market, you should examine both short sale opportunities, as well as, buying home foreclosures. Which real estate transaction is in your best interest, and which kind of transaction deserves the majority of your attention? 

Before evaluating the advantages and disadvantages of buying short sales and foreclosed properties in Grand Rapids, MI, make sure you understand the actual processes of each transaction. 

The foreclosure process develops when a Michigan homeowner has become delinquent on their residential home loan. They’re unable to pay their mortgage and have used up all other options. Typically the property is sold off at a foreclosure auction or the ownership reverts back to the initial loan provider. Short sales in Grand Rapids are an alternate course of action to the property foreclosure method. The foreclosure process in Michigan has a negative effect towards credit score reports and is rather expensive for mortgage companies. With the short sale process in Michigan, instead of home foreclosure, the house is usually offered, at a reduced amount of the mortgage balance due, for sale ahead of a public auction. 

So, which real estate transaction is going to be more advantageous for you? Buying Michigan real estate foreclosures or buying short sales in Grand Rapids? It depends, however, a good Realtor in Grand Rapids will be able to help you. 

Usually, with the short sale transaction, the lenders will have the final say; the mortgage company authorizes all of the final offers. Having said that, the mortgage lender will not propose a short sale themselves, they will expect the borrower to make good on the actual loan amount or expect the homeowner to sell the property or home at full market price. 

Once the property owner realizes they have little or no other solution, will contact the financial institution to seek information about the short sale process in Michigan. The property or home owner understands they will have to leave the property after it is sold. 

On the other hand, foreclosures in Grand Rapids, MI can result in disorderly evictions; a number of home occupants refuse to abandon their home’s without the need of force. Essentially, with foreclosed homes, you could end up being left with really difficult occupants who actually refuse to move, unless of course the authorities intervene. 

If this is your initial purchase and / or you’re looking for fewer headaches following the purchase, it really is a better idea to purchase a short sale house or simply buy empty home foreclosures in Grand Rapids

When buying Michigan short sales, you pay considerably less than the unpaid residential home loan balance. This approach usually means getting an outstanding investment for your money. For example, buyers might be able to purchase a well-kept single family house for under $50,000 if the outstanding mortgage loan balance is $75,000 or less. 

Buying Michigan foreclosures, alternatively, can be done for dirt-cheap, however, the amount you actually end up paying is going to be dependent on the condition of the particular home and the competition that shows up at the property foreclosure auction. Remember to keep in mind that individuals that allow their homes to go into foreclosure have usually reached a place where they don’t really care about the house anymore; which could result in a house that has also been damaged and quite possibly will need extensive remodeling and / or maintenance. 

If you’re looking to make the largest return on your investment, buying Grand Rapids foreclosures is usually an individual’s best option. If you’re looking to get the best value for your hard earned money, looking at short sales in Grand Rapids is usually the best solution. 

Michigan foreclosure sales have lots of guidelines and regulations that must be followed. 

In many scenarios, payment in full is necessary within 24 or 48 hours after the auction. Usually, there are more experienced real estate investors with cash on hand that participate and are very successful at property foreclosure auction sales. Many of these investors have substantial monetary resources and will simply out bid an individual on a piece of property; if they really want it. If you really want to find a new home or perhaps you’re just getting up and running with real estate investing, you’ll more than likely have to acquire some decent funding to start with. 

Unless you have a spotless credit report, most financial institutions will not fund the possibility of people successfully winning at a Michigan home foreclosure auction. Mortgage lenders, on the other hand, will provide you with the necessary funds to purchase short sale property in Grand Rapids. 

Buying Michigan short sales or home foreclosure properties both offer good quality investment options. If you’re a real estate investor or the hopeful first-time home buyer, always keep your options open; you never know what you’ll bargains you’ll find when buying foreclosures or short sales in Grand Rapids, MI.

Short Sale Realtors in Grand Rapids MI

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Choosing a Short Sale Realtor in Grand Rapids MI is a decision that shouldn’t be taken lightly.

Having to sell your house through the short sale process and the actual transaction itself has the potential to become a tremendously complicated procedure, one that could be a huge uphill battle and filled with many pitfalls if you decide to work with the wrong real estate agent; an agent with little or no short sale experience.

You’ll want to make sure you’re working with a Grand Rapids Realtor that not only understands the short sale process, but an agent that has successfully closed many short sale transactions along the way. 

Working with a Realtor in Michigan that has little or no short sale experience will do nothing but add to the challenges of successfully negotiating a reduction of your mortgage, as well as, getting your house sold and closed in a timely manner.

The goal of any short sale transaction is to negotiate with your current lender, getting them to agree to accept less than you owe on your present mortgage and finding a buyer that is willing to purchase your house in its current condition.

There are many Realtors in the Grand Rapids and West Michigan area that have been actively advertising to help homeowners with their short sale transactions. The sad part is many of these real estate agents have little or no real world experience; some of these agents have only taken a few hours of classes which isn’t anywhere near enough training or experience to successfully complete a short sale transaction in Michigan.

You’ll want to make sure the short sale Realtor you decide to work with has a good combination of real estate certifications, as well as, many successfully closed real estate short sale transactions.

How to Choose a Michigan Short Sale Real Estate Agent

Now that you have a little better understanding of the Michigan short sale process and some idea of the minimum qualifications you should look for in a Real Estate Agent here are a few more suggestions you should also consider while searching for your agent, a Realtor that will soon become the most critical part of your short sale process.

Use a Realtor That is Licensed to do Business in Michigan

Make sure you are working with a local Realtor, a Realtor that is licensed to do business in the State of Michigan. There are some Mortgage Brokers and others that will try to broker the deal for you; for a fee or percentage of the sale price. There are also a lot of out-of-state Realtors that are licensed to do business in our state, however, if it were my house; I would want to make sure my realtor is living in my area.

Ask Questions about the Michigan Short Sale Process 

Don’t be afraid to ask any questions you may have about the short sale process in Michigan. You should ask questions about what to expect along the way through the sale, what type of services your Realtor will provide for you and what they will expect of you. You’re placing a lot of responsibility into the hands of this Michigan Short Sale Specialist, you’ll want to make sure that you’re happy with their answers; after all, this Realtor will be working for you.

A good, qualified short sale Realtor with plenty of real estate experience will be comfortable giving you a road map of what to expect and the steps you should follow as they help guide you through this process.

Failure to completely answer these questions to your satisfaction, or not feeling comfortable with this particular Realtor should give you cause to seek another real estate agent to help guide you through the short sale process.

You should also avoid real estate agents that tell you they can guarantee you results such as the exact amount your lender is willing to settle for, or give you an exact date when you can expect to close the transaction, unless of course you are well into your way through the process; in a short sale transaction nothing is guaranteed.

There are a lot of agents out there that will say anything to get you to sign on the dotted line and lock you into a contract, also, make sure they’re the primary Realtor who will be working with your transaction and not just working as a front for another agent they plan on splitting the commission with. 

Short Sale Experience Makes a Big Difference

Be sure to ask the agent about how much experience they have in real estate in general, and more importantly, the number of successful short sale transactions they have personally handled.  There’s a big difference between the amount of short sale listings an agent has, and the amount of successful short sale transactions they have completed. Any licensed agent can list a property; a good short sale agent with experience can get those hard to close short sales done.

Unfortunately, not every real estate short sale transaction can be completed successfully for one reason or another, due to circumstances beyond your control.

Don’t be afraid to ask this agent for a few references from past clients, if they have lots of short sale experience, they will have plenty of people who should be willing to say how well this agent helped them through their short sale process. If the Realtor won’t give out any references from previous short sale clients, this could be a sign that either they have little or no previous short sale clients or worse, their previous customers don’t have anything positive to say about the services this agent provided.

Potential Short Sale Liabilities

As with any real estate transaction, there are several potential pitfalls and liabilities you may encounter during the short sale process in Michigan. Short sale laws change, Banks and Lenders may not agree to the sale process or the final sale price, even buyers can back out; leaving you back to square one.

It’s important that you work with a short sale real estate agent who can adequately and comfortably discuss these potential liabilities with you. While it’s not practical to expect to receive tax or legal advice from your short sale agent, they should at least have a working knowledge of these important aspects of the short sale process. You should always consult with an Attorney and a CPA or Tax Accountant about the potential issues you may face as a result of your short sale.

Working with an agent that has a clear understanding of the short sale laws and the tax implications is well worth considering when you are in the process of selecting a good short sale Realtor.

As a homeowner, finding yourself in the position to have to consider short selling your home in the first place is stressful enough as it is, let us help you resolve this issue professionally, confidently, and with your best interest in mind at all times.

Our licensed Michigan short sale agents have the experience, the negotiation skills and the education to get the job done properly the first time. We work with lenders all over the State of Michigan and are successfully handling short sale transactions on a daily basis.

Best of all, our short sale services are completely free to you as the homeowner. The banks and lenders pay our fees. Why not give us call today and see if there’s something we can do for you.