In today's Real Estate Market we find Bank Owned Homes, Short Sales and Regular Sales. Most buyers look for bank owned homes, since they are being listed at a low price and available to close quickly. Short Sales are also priced low, but are they truly available? What's the difference between a bank-owned home and a short sale? We see more regular sales come on the market and for the most part are priced closely to the short sales and bank owned.
There are three types of properties:
• Short Sales (Pre-Foreclosures)
• Bank Owned (Post-Foreclosures)
• "Regular" Listings (Non-Foreclosures)
SHORT SALES:
Short Sales can be a great deal. However, you won't know if it's a great deal until the lender has approved the short sale price. The home will be listed by an agent at a price that they feel is appropriate or will bring buyers, and will be adjusted once the lender has completed a thorough analysis of the home and decides on the actual sales price. In general, the lender approved price is listed below the current market rate in order to sell quickly. But remember, there are many buyers looking for the same great deal. Especially in the first-time home buyer price range, $400K and below, there is lots of competition, which drives up the price of the home during the multiple offer "war".
Until the lender has approved the short sale and price of the home, it's a big waiting game. From the time a home is listed on the market to the time the price is approved by the lender it can take between 2-3 minimum and up to 6 months+ before the short sale has been approved and priced to sell. Anything can happen during that time!!! The home owner could negotiate a loan modification, which is great for them, or simply not cooperate to show the home and decide to let it go into foreclosure. If you have made an offer at the beginning of the short sale process, don't be surprised if other offers come in once the short sale has been approved.
Not to discourage anyone from buying a short sale, they can be great deals, I just want you to be aware of what to expect.
BANK OWNED HOMES (Real Estate Owned - REO's)
These are the homes that everybody wants. Why? Because they are priced right and they are ready to be purchased. No long waiting and no guessing. The challenge is to beat the competition. Not only in the lower price ranges, but in any price range, the competition is high. Once a bank owned home hits the market, you'll need to be one of the first ones to be there and make an offer. The stronger your offer, the better chance for you to win the bid. A strong offer is one that comes closest to the list price, including above asking price offers, with either a cash offer or a high down payment.
Where do we find Bank Owned Homes? In today's market you'll find them in pretty much every city. However, those that are in more high-end neighborhoods, 1 Million and up, they are much harder to find.
"REGULAR" LISTINGS
If you are looking for a bargain you should not ignore homes that are sold by owners. Most sellers who are listing their home in today's market have a very good reason to sell and understand that they have to compete with the foreclosure homes. Many sellers have to sell due to personal, job related or financial reasons. Others would like to sell and are simply curious if their home will sell and give it a try. Either way you'll know very quickly how motivated a seller is once you make an offer. Many times I can find out before hand how much room there is for negotiations or simply make an offer that would be a good deal for you and a fair price for the seller.
Bottom line, in order for a buyer to get into a home, he/she should look at everything that's on the market.
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