For the right buyer these can make great homes or investments. There are a few things to keep in mind before you enter into a contract on one of these.
In a transaction that is a Short Sale the current homeowners are usually in the loop of negotiations and then the lender has to approve the sale. It can add days or weeks to a transaction. When you have a traditional real estate transaction the closing usually will take about 30-45 day’s for homes where a buyer will need a mortgage in order to purchase the property. With a Short Sale it can take two weeks just to get an answer on your offer from the bank. You need to be prepared for a lengthy process.
In a FORECLOSURE the transaction is all about the SELLER & their bottom line and not about you. It can also be a very long process & can mean several hoops need to be jumped through in order to purchase the house.
These homes tend to be neglected either because of the current (as in a Short Sale) owners lack of funds, loss of job etc. Or in the case of a Foreclosure the homes are typically vacant for a long period of time and can be vandalized and stripped waiting for the process to get to the point of sale. These homes will rarely be move in ready. Because of this standard FHA & VA loans are not available to the buyer’s. There are rehab loans that can be secured but this also will add time to the transaction.