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Idaho Short Sales and Foreclosures: Buying Homes at a Discount |
By Lisa Kratz
 A short sale is a situation in which a home is purchased for less than the amount owed on the current loan . These situations are becoming more common in the Idaho real estate market, where lenders are trying to recoup whatever balance they can from loans that are seriously delinquent. When the value of the property has fallen below the loan balance, and the borrower cannot meet the obligations of the loan , few options remain other than selling the property short sale.
Foreclosures, on the other hand, are situations in which the lender has actually taken physical control back over a property when a borrower has neglected to make payments over a period of time. In the case of a foreclosure, the bank or other lending institution sells the property , in hopes of making a profit over the loan balance and any associated debts, such as outstanding taxes.
Both foreclosures and short sales are viewed as potential bargain properties in the Idaho real estate market. In the case of a
foreclosure, buyers are expected to have cash on hand to purchase the property in the full amount of the winning bid at an auction. In many cases, foreclosed homes are offered at an auction, with the bid starting at the current loan balance . In the current Idaho real estate market, many of these foreclosed properties have outstanding mortgages close to or {greater larger}}} than the current value of the home. Its possible to get a great deal on a foreclosure, if you choose the right property and have a little bit of luck on your side.
There are mixed reviews about short sales. Idaho property investors are vocalizing their concerns over their less than scrupulous counterparts who are listing these properties at ridiculously low prices to lure buyers in, knowing full well that the lienholder will never accept an offer that low. Short sales seem more promising for landing a great real estate deal in Idaho right now, however, due to the fact these sales are made at a purchase price lower than what is owed. So in this case, even if the borrower ended up losing a home that had decreased in value so much so that the mortgage balance was higher than the homes value, the lending institution is willing to sell the property at a lower price in order to recoup some of its losses.
In Idaho, deeds of trust are frequently used. A deed of trust is essentially like a mortgage, except that the borrower holds full title to the property and allows the lender to hold a lien against the property. In the case of a borrower defaulting on the loan , the lender may then foreclose on the property. This is called a power of sale clause, and essentially it means that the lender has the power to sell the property to pay off the loan if the borrower defaults on the mortgage. In some cases, the clause specifies the time and location this sale will take place. If the clause has these specifications, then they must be followed.
If the deed of trust does not contain these specifications, the lender is required to follow the non-judicial procedure, which means that notice of the sale must be made 120 days prior to the date of the sale. The borrower and the court will be notified of the upcoming sale, which means that potential Idaho real estate investors can learn of pending foreclosures through the public records.
In general, home prices are down right now in the Idaho real estate market, so take advantage of a good thing! Whether youre looking at a foreclosure, a short sale, or a traditional sale, its a great time to get a great deal in Idaho real estate!
Lisa Kratz is an Idaho mortgage lender. Visit Compare Idaho Lenders to find the best rates on an Idaho mortgage.
Foreclosure
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