Elgin, IL Short Sales and REO's
Today, I've run a search on the city of Elgin and have found 156 single family homes listed as Active with either Short Sale or Bank owned REO indicated. They range in price from $44,900 at 216 Ann http://cli.gs/DEsar1 all the way to $899,900, 200 Wrenwood Circle- http://cli.gs/GqaQe7).
In recent weeks, the media has shouted long and loud about foreclosures, foreclosures, foreclosures! Well, the short sale is a foreclosure and I have to say, it can be disheartening to home buyers who are seeking a deep discount. The top 3 biggest deal breakers I have found are hidden liens on the property, second mortgages and HOA language that makes a mess of things for owners trying to get out from a mortgage. Hidden liens can include a mechanic's lien or a payment that is due to a contractor for work on the property. A second mortgage or line of credit, with another lender, can come into play because the first mortgage holder wants first right of refusal of any offers, and then the offer must be approved by the secondary lender, who may or may not approve, but get stuck holding a mortgage that won't be paid back. They can put pressure on the buyer to pay off the secondary debt, much to the dismay of the potential home buyer! Finally, I've found that HOA-Home Owners Association-, can severely limit the owner's options when it comes to selling. If the property is not FHA approved, the owners may miss out on a lot of potential buyers.
However, a bank owned REO does skip over a lot of the drama and a buyer will get an clear title. Unfortunately, we'll be seeing a lot more bank owned REO's because after a short sale fails to go through and a person loses their home, the home reverts back to the bank. A great deal right? Well, sometimes. If a property is abandoned or looks vacant, it can bring in squatters or vandals to a quiet neighborhood. Empty property makes a buyer question the area much more than an occupied home. Then you'll see a list price sometimes 20% or more below normal market value creating havoc on the neighborhood homes' values.
The flood of short sales/REO's is a going to confuse a lot of home buyers who are trying to get a good value in this real estate market. If you have questions on how to navigate short sales or REO's, let me get you the answers!