Question: What’s Different About Buying a Short Sale or Foreclosure?
When showing clients homes, the discussion of buying short sales and foreclosures usually comes up. Here is an article I found on the ActiveRain network by a fellow Realtor describing the differences of them. Hope this helps!
I often hear this question from buyers, even if they’ve bought real estate in the past. Never has there been such a large percentage of distressed sales available to consider, and understanding the nuances is an important part of purchasing decision.
Regular Sale The seller is the owner of the property, and the person making decisions on any offers received. They typically have equity in the home and will be the person involved in negotiations. They have knowledge about the property’s condition and will fill out a series of disclosures for the buyer.
Short Sale. The seller is the owner, with an outstanding loan balance that is higher than the property’s value. The bank (or banks) holding the loans will have to approve the purchase price, although the seller is initially the one to sign the offer. Pricing on a short sale can vary – it is set by the seller and/or their agent, and may not reflect the price the bank will actually agree to. Most times, a notice of default has already been filed, and the seller is under a timeline to sell the property before the bank forecloses. A grossly underpriced house can indicate that the trustee sale date is fast-approaching.
Foreclosed Property (REO) The bank has already foreclosed on the property, and now is the seller of record. They have hired an agent who represents the bank, and usually have put the property back in reasonable condition. Most bank-owned properties are priced under market value. Because the bank is taking a loss already, they generally don’t make additional repairs or concessions, but this can vary by market area or neighborhood, due to competition. In the Tri-Valley region, much of Alameda and Contra Costa Counties, inventory is still less than ‘normal’ levels, and these lower priced properties move quickly.
Tri Valley real estate for buyers and sellers. Search for homes in Livermore, Pleasanton, and Dublin.
I can also help you in the surrounding areas of Alameda County and Contra Costa County
including Castro Valley, San Leandro, San Lorenzo, San Ramon, Danville, Brentwood and Mountain House
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