What They Haven't Told You About
Short-Sale Homes vs. Bank Owned Homes
The number of homes coming onto the market has increased of late in the
Vancouver WA and Camas areas that are in the Bank Owned and Short-Sale
categories. We've fielded many inquiries from clients as to what are
the differences between purchasing the two types of homes and what is the
better deal. (...and YES, there are BIG Differences).
Let's start with some of the similarities: in each case
the home itself has likely had some exposure to the financial hardship, often
causing deferred maintenance issues and perhaps some utility company liens to be
present. In the worst cases there may be missing fixtures or other
damage(s); for whatever reason, that you'll want to attend to. In both
cases these homes are usually sold in AS-IS Condition.
Having YOUR Financing in order prior to viewing these homes and writing
an offer is also critical. There are currently many great programs
available, even loans for homes that require immediate TLC!
When writing a purchase and sale agreement for one of these homes, there will
also be a "Bank" (mortgage lender) involved HOWEVER, here's where the process
becomes very different.
Let's start with the easiest one to explain, the Bank Owned Home or, sometimes
known as an REO = Real Estate Owned (as the Accountant at the Bank knows it).
This piece of real estate has already been through
Foreclosure
and Auctioned at the Clark County Courthouse Steps. The Bank has bid up
the price on the home, and eventually outbid other Cash Investors at the action
and now expects to sell the home on the open market. Offers made now on
such homes are usually reviewed and responded to in about two business days.
Once an offer is agreed to, Closing and possession has occurred in as little as
a week and a half in our office!
The Short-Sale purchase is very much different with respect to the offer and
acceptance process. Here there may be two or three banks involved,
covering the First Mortgage; Second Mortgage, and sometimes the Equity Line of
Credit Loan! To get all these entities to agree on a price, and which one
of the banks to take the biggest Hit is a time-consuming and less-than-certain
process. An offer on a short-sale usually takes weeks to get an approval
-- and may never get approved.
Additionally with short-sales there may be several
competing offers or back-up offers that the Banks love to see (the Bank wants
the highest sales price possible). In these situations there can be
another long time factor in revising upward offers until the highest accepted
offer wins.
Finally, if the Bank (or, one of the banks) declares times-up and schedules a
Foreclosure Auction, and the time of the auction is less than 20 days, the
short-sale will probably fail as there is insufficient time to safely Close the
transaction.
To briefly sum it up, a Bank Owned Home can be purchased rather quickly with
reasonable certainty; while the Short-Sale property usually has much
uncertainty. Thus, as real estate agents in the Vancouver WA and Camas
markets we recommend home shoppers to look at Bank Owned Homes, and prefer the
Investing property shopper to look at both.
There are very few search parameters we Realtors can use in the RMLS system to
identify bank owned homes. However, we've created a list of about a dozen
fine homes, mostly bank owned homes for you to view at:
Bank Owned Homes in Vancouver WA.
If you have any questions or interest in Bank Owned Homes in Camas or Vancouver
WA please contact us right away!
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OUTSTANDING POST! Anyone thinking about purchasing a short sale needs to read this!