When it comes to real estate transactions, there are typically three main categories: traditional sales, short sales, and foreclosures. For buyers, each option comes with distinct advantages and disadvantages, with short sales and foreclosures generally offering more affordable pricing. However, as experienced Chicago real estate professionals, we always remind our clients that these properties are usually priced lower for legitimate reasons. Your best option ultimately depends on your financial situation, timeline, and whether you’re buying to live in the property or as an investment. Let’s examine traditional sales versus short sales and foreclosures in Chicago.
Traditional Sales
Traditional sales represent the standard real estate transaction most people envision. They involve a willing seller and buyer who mutually agree on a specific purchase price. While the seller may have personal reasons for selling, they aren’t being forced to sell by a financial institution, unlike short sales and foreclosures in Chicago. These transactions typically proceed more smoothly, with fewer complications and a clearer timeline.
Short Sales
With short sales, the sale proceeds aren’t sufficient to cover the outstanding mortgage balance—hence the term “short.” Despite the name, there’s nothing quick about these transactions. Since the seller must obtain lender approval for the sale price, short sales can be lengthy processes. What they do offer is an opportunity for homeowners to avoid foreclosure. For patient buyers willing to navigate the waiting period after submitting an offer, short sales can present valuable opportunities for savings.
Foreclosures
When a homeowner falls behind on mortgage payments, the lender may issue a foreclosure notice, indicating the property will enter foreclosure after 90 days. If the homeowner doesn’t bring payments current or arrange a payment plan, the property goes to auction where individuals and companies can bid on it (typically with a minimum bid requirement). Frequently, the lender reclaims the property with plans to resell it, often at a reduced price to recover their investment quickly.
Foreclosures typically offer excellent opportunities for buyers seeking good deals, but these transactions come with significant complexities. The process can be emotionally charged as people are being forced from their homes. At CVG Properties, we understand that homeowners are sometimes forced into foreclosure due to circumstances beyond their control—extended illness, unexpected job loss, divorce, or even challenging code violations in older Chicago neighborhoods that become too costly to address.
While foreclosure is undoubtedly difficult for homeowners, it presents opportunities for investors and buyers looking for value. The silver lining for sellers facing foreclosure is that they can exclude canceled debt from their income tax returns and are relieved of mortgage payments. However, the entire process typically spans several months, during which the house remains in the homeowner’s possession until everything is finalized—creating uncertainty for all parties involved.
Observations About Short Sales and Foreclosures
Short sales in Chicago generally take considerably longer to close than traditional sales, requiring extensive documentation and prolonged negotiations between the seller and lender. When you make an offer on a short sale, it must not only receive seller acceptance but also lender approval (since they’re accepting a loss). If your offer isn’t approved, you’ll need to restart the entire process. Consequently, short sales typically require three to six months to complete, while foreclosures usually close within 30 to 45 days after offer acceptance—a significant difference for buyers with tight timelines.
Another crucial consideration is that short sale and foreclosure properties often sit vacant for extended periods and frequently show signs of neglect or disrepair. Additionally, these properties are almost always sold as-is, sometimes with city code violations that need addressing. The upside for buyers is that with some investment in repairs and renovation—something our team at CVG Properties specializes in handling—you can secure significant value. Our expertise with older Chicago homes and resolving municipal code issues can be particularly valuable when considering these property types.
Traditional sales vs. short sales and foreclosures in Chicago – which option aligns with your goals? The right choice primarily depends on your purpose for buying, whether you’re planning to live in the property or use it as an investment. It also hinges on your patience for potentially lengthy processes and willingness to take on properties that may need work. In these complex situations, having guidance from bilingual, transparent real estate professionals who understand Chicago’s unique property landscape becomes invaluable. We’re ready to provide the straightforward, honest advice you need. Call us today at 312-625-6506!
Looking for expert guidance on Chicago short sales or foreclosures? As Chicago’s specialists in challenging properties, we can help navigate the complexities! Contact us today for a transparent, no-surprise consultation! 312-625-6506