Short Sales versus REO's

If the buyers are interested in the property then you sohuld try all 3.  Make an offer on it subject to short sale approval.  If it does not go through, try to buy it at the auction.  If that does not work, then keep checking MLS after the auction and make an offer on it right away.

If the goal is just to buy distressed properties, REO is a lot easier.

interesting article on short sales .  I enjoyed reading it!

Don Bradbury

Hi Marie,

The simple fact that most people feel short sales are too difficult to accomplish, makes the short sale a better avenue.  There are less people going after that market.  

I realize your post was five months ago, so the climate prolly has changed a little. 

Hopefully, you and others here have since had success with short sales as a means to get this RE locomotive moving forward.

The key is to work with a lender that's knowledgeable and can process the loan for your borrower and process the short sale for the seller.

Paul

Marie, I have two transactions going right now that fit your question perfectly. First, buyers made an offer on a short sale on August 8th. We found out yesterday 10/13 the bank in 1st position has agreed to accept our offer providing the 2nd bank will accept their $1000 token. We should find out on Monday. If the number 2 bank does not accept offer from the 1st bank this home will foreclose on 10/31. My clients will try after the foreclosure because they really want this home.

2nd transaction involves an REO with Countrywide holding the transaction. They (Countrywide) can be a pain, but we got an acceptance of our offer within a couple of days. REO's are much quicker if you can get your clients to make a reasonable offer.

Hey William,

I realize this is not my blog, but time is the critical factor, if your clients have the time to wait as mine do they can end up with a better deal. By the way my buyers on the REO transaction are signing tomorrow. Ya Hoo!

My short sale offer is still waiting for a "committee" decision. We had been told they were approving, but now???

The short sale process with two lenders and an unexperienced agent on the listing side is a huge pain in the ass. 

I would agree with most that you will probably get a quicker response with an REO, simply because most agents are not aware of the process and how to get a short sale approved quickly.  It is not hard, with the right system.  I personally would only make an offer for a client on a short sale where I controlled the listing or I could get the listing agent to allow me to assist in submiting and negotiating the short sale.

-Trent

In Contra Costa we have a huge portfolio of short sales and REO's. Obviously the REO's will close faster but I don't think you should automatically rule out the short sales. The banks are more open and more cooperative and frankly they do not want to increase their inventory of bank owned properties due to the expense. The short sales still are lengthy and yes they do demand a lot of time and effort but if you can help someone to minimize their risk it is well worth it.

On the other hand, we have quite a bit of inventory period and there are some great deals out there right now. Buyers need to take into consideration the whole picture and not just bits and pieces.

The media certainly has not been a big help in that respect.

Marie,

          I think either one is a good deal, but what i see is that if your buyer is willing to wait ultimately a short sale ends up being the more for your money.  Yes you have to wait it out, but weather it's a REO or SS in the end it's still a foreclosure.....  A short sale is a pre-foreclosure, where a REO lets the lender try and mark it up and sell the property for what ever they want.  Ultimately its getting our clients the best deal possible!

 The Keutla Team

Marie

I am a firm believer in this phrase "He who hesitates is lunch" gotta get while the getting can be had.

I personally have seen better deals with Short Sales versus REOs.  Since the lender has an opportunity to save the money they would spend on the foreclosure process, repairs, maintenance, carrying costs, etc. it seems like the lenders have been loosening up a bit, and accepting considerably less than what is owed.

The keys that I have seen are 1. Most lenders will not accept any package or information without a written offer to purchase the property.  To be effective, in the short period of time allotted, the seller must continuously drop the price until an offer comes in.  Often times, this offer is much lower that anyone would have dreamed, but without it, the lender does not even want to talk to you.  2.  The Seller, or their Agent has to submit a complete package to the lender the first time.  Always provide all the information they need.  Do not send in subsequent documents, etc. as the lenders have admitted that this information has a difficult path to find it's way to the appropriate folder.

If your Buyers are patient, and understand the process, I believe they can find better values with short sales.

Marie,

REO transaction probably will happen faster because the mortgage lender doesn't want to be a property owner. In short sales, lenders often like to negotiate and shuffle papers forever and that can be discouraging.