Foreclosures in the Colorado Springs Area
Perhaps you've had someone encourage you to look at purchasing a foreclosure as your first home. The thought is that you'll save a lot of money and get a deal if you buy a bank owned property, but make sure you know what you're getting into.
First of all, there are a couple different distinctions with what are commonly referred to as "foreclosures."
- Short Sale: In this case, the owner is behind on their mortgage payments and the balance due on their loan is more than what the house is worth. The mortgage company (or bank) knows that it will be cheaper to sell the property during this stage than going through the full foreclosure process, even if they have to take less that what is owed on the mortgage, hence the name "Short Sale". The tough part about short sales is that once the owner accepts your offer, the offer must be submitted to the mortgage company so they can determine the exact amount they're going to come up short on this loan. Typically, just this approval process can take 4-6 weeks. As a buyer, you'll need to be patient and have time to wait on your new home as it could take months before you actually take possession.
- Bank Owned: The property has already gone through the entire foreclosure process and now the bank (or mortgage company who had the loan) owns the property. As a buyer, you're dealing directly with the bank. You're typically at their mercy and signing disclosures stating that you're taking possession as-is. Although you will usually get "a deal" and pay less than market value, you'll probably have repairs and updates that will need to be taken care of immediately, from busted pipes to foundation issues. Again, if you're not on a time deadline to move, these can be good options for some buyers.
