Short Sales, Pre Foreclosure, Foreclosures, REO - Bank Owned property

First of all, this is from experience, Short sale properties are a very good buy - what is a short sale? A short sale means that the bank is willing to accept less money than what is owed on it. (Short of the amount owed) It has nothing to do with the amount of time it takes to close the deal. Actually if you were to call it by what it is - it would be called a - long sale - if ever sale.  When I say -  if ever - I mean that a lot of times, even though its explained to the buyer - it usually takes 60-100 days to close a short sale, about 50% of the time, the buyer looses patience 60 days into it - I have literally received an approval 1 day after the buyer lost patience - and let me tell you, ocean front condo, sold for $940,000 3 years ago, and we had an approval at $640,000, but it was too late. Luckily our office had a backup - but too often the buyer loses patience too soon. The key is to keep everybody geared up and mentally ready for the road ahead

Pricing? Why would a short sale be cheaper than an REO (bank owned property)? Because there are more cost involved in actually foreclosing on a property, you have the upfront cost of Lawyers, court costs, locksmiths, preservation cost, title cost, just to name a few. Then you have the hidden cost - you have the fact that it will be tied up another 4-8 months just getting all the legal paperwork handled, adding those months, to the amount of months that payments are not coming in, then you have the additional depreciation that may come in as a factor, and you have the bank having to take out there check book to buy it back at auction.  Bottom line is - the bank does not want to foreclose on a home. 

Example as of today, I have a listing in a subdivision - all the same homes, there is an REO property listed at $345,00, I have the exact same home listed as a short sale - and the bank told me to list it at $319,000 - exact same home.

Other benefits - First of all in a foreclosed home - often times the homeowner feels contempt against the bank, often times stripping the home of anything of value, including even sabotaging the property. I have walked in and seen water heaters, sinks, light fixtures all missing. I have even heard of owners flushing concrete down the toilets as they leave! And guess what - you get no disclosures, you have no legal recourse - so if  you buy that home, and  the foundation has to be torn up to replace plumbing, or  the roof has been leaking for years and no one mentioned it - your all on your own - you own it baby - for better or for worse.   
When you purchase a home in a short sale status - you have a homeowner that still has pride in their home, they are still bound by law to give you disclosures, and you have legal remedies if something is not disclosed. You have someone to ask questions to. Bottom line is, you're covered!

Low balling a short sale, or for that matter even an REO property? Don't waste your time or mine - please. The banks pay for appraisals or BPOs to be done on the property before they list it, or sell it. So they know the market, and the market value before a price is ever put on it. Typically you will see a Foreclosed property listed just below market value, they price it well. With a Short sale, you will see it listed another few percent below that of foreclosed home, again back to paragraph  2  the bank DOES NOT want to foreclose on a home - all they want is their money back, or as much of it as possible back! And please remember, this is not Las Vegas, Phoenix, or California. HOMES STILL SELL IN HAWAII and the bank knows that.

Last but not least - please  feel free to call me at anytime - you'll get honest, straight forward information.

Aloha, and have a great day

Lance Owens (RS)

(808) 936-8383

Lance@KonaHomeTeam.com

www.KonaHomeTeam.com

Aloha Kona Realty Inc.

78-6740 Alii Drive