Who to Buy From: Different Types of Sellers
The process of purchasing a home in Colorado can vary depending on the seller of the home. While you may receive a great deal if you purchase a short sale it may take you six months to purchase the home. A HUD home can be a great deal too, but it may cost you more money to de-winterize the property. There are some great real estate deals, but they come at a price.
A resale transaction is when you are purchasing a Colorado home from another person/family and it is not a short sale. Homes in Colorado sold as a resale are generally in better condition and with fewer headaches than other types of sellers, but they often sale at a higher price too.
A short sale in Colorado is when the seller of the home is attempting to sale their house for less then they owe. Once the buyer and seller come to terms on the purchase price of the house, the seller must then submit the terms of the contract to their mortgage company(s) for approval. Buyers will usually receive a discount when they purchase a short sale home in Colorado, however it can take banks a few weeks to over six months to approve, decline, or counter the terms of the purchase contract.
Purchasing a home from a builder in Colorado is a relatively simple process; however we still recommend you obtain a real estate agent to represent your interest in the transaction. A lot of Colorado homebuyers don’t know they CAN and should negotiate the price and terms with builders.
You can purchase foreclosed homes in Colorado at public auctions held in almost every county. However, you must be prepared as you don’t have the ability to have the home inspected or appraised after you win the auction and you must be prepared to pay for the home immediately. Purchasing foreclosures in Colorado is not a realistic option for most potential home buyers.
When a property goes to auction in Colorado the mortgage lender or bank that was owed money usually will win the auction and sale the house to mitigate their losses. Most banks and lenders will hire a company to handle the process of selling the house. It can take 60 days to 180 days (sometimes even longer) for a bank owned home to be offered for sale after the auction. All banks and lenders have their own contracts and sales process, and most lenders are very strict with their timelines once they accept your offer.
HUD homes were foreclosed houses with FHA insured mortgages owned by the Department of Housing & Urban Development (HUD). HUD homes in Colorado are first offered for sale to homebuyers looking to purchase a home as their primary residence and then are offered to sale for all homebuyers. FHA often offers special mortgage programs to purchase HUD homes.
To sale the home quickly banks and HUD will often sale a house for less than market value in Colorado. Banked owned homes, however, typically require repairs and a lot of cleaning before they are “move in” ready. Bank owned homes in Colorado are often winterized to protect the house from cold weather and require the buyer to pay for the home to be de-winterized to complete the appraisal and inspection. When considering buying a bank owned or HUD home property you need to take in account the additional costs of repair and purchasing the house to determine if the house is a good deal.
Next Step: Making an Offer
Back to: Colorado Buyer’s Guide