Destin Florida Foreclosures | Short Sales | REO | Bank Owned
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This article contains useful information about Short Sales, Foreclosures, and REO "Bank Owned" properties.
WHY ATTEMPT A SHORT SALE? A short sale is an attempt for a borrower (seller) to avoid a foreclosure by selling the property for less than the amount of the loan. The borrower (seller) will request that the bank forgive the deficiency and it is less damaging to their credit score than a foreclosure. The bank is often open to this because it can cost them less money in the long run than the foreclosure process. The borrower must show the bank they are experiencing a financial hardship and many banks will not even discuss the short sale until the borrower is past due.
In a short sale, the borrower (seller) can place the property on the MLS "multiple listing service" for whatever price he and the agent would like in hopes that the bank will accept the offer. The "undervalued" short sale creates a false and deflated value and often a disappointed buyer because the bank, after their analysis, may decline the offer. The short sale process can easily take 90 days; therefore; a buyer needing a house today may not be a good candidate for a short sale but most importantly the bank may decline a full price offer because the seller (borrower) priced the property too low. If a buyer can be patient, a short sale can work, but if it seems too good to be true, it probably is.
I have seen many situations where the short sale sold price "final price" is more than the actual listed price. I think it is important for buyers to understand this process to avoid frustration and wasted efforts. Many successful short sales have taken place, but they were priced correctly and it took time for the bank to review and accept the offer. An ideal short sale is a situation is the "pre-approved" short sale. The pre-approved short sale price and terms have been worked out with the bank prior to the contract and these can be done quickly. Every bank has a different policy when it comes to short sales, therefore, the results can vary from bank to bank. If you are a borrower in a situation where short sale or foreclosure advice is needed, I strongly recommend that you consult with an attorney.
On the other hand, the purchase of a REO (Real Estate Owned) property is a faster strategy. The REO property is bank owned and past the foreclosure process. They are often priced aggressively and offer the ability of an inspection and a quick closing. The list prices are real and one making a good offer with solid funding should be able to close the deal. The biggest challenge with bank owned properties is multiple offers. An experienced REO buyers agent can definitely increase your chance for success.
Another mistake that many purchasers make is ruling out traditional properties that are not in the short sale or reo category. You may have a seller that has owned the property for many years with a low cost basis and is realistic on price or you may have a seller that can afford to sell the property for less than owed without involving the bank in the sale or "Short Sale". Many buyers make the mistake of ruling out these opportunities. This is where the benefit of having a realtor comes into play. A good realtor understands the market and can advise you on the best opportunities. Please check out my website at mainsailrealtycompany.com and let me know if I can help you in any way. I have worked in real estate on the Emerald Coast of Florida for over 10 years and have a great understanding of Destin, Sandestin, Miramar Beach, 30A, Santa Rosa Beach, WaterColor, WaterSound, Rosemary Beach, Alys Beach, and Seacrest. I service Okaloosa and Walton Counties.
Do you need help completing a short sale? Please visit the site below for more information on Short Sale Help.
Short Sale Help - Mainsail Realty Company
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