Is Purchasing a Bank Owned or Short Sale Home In Gilbert Better?
Well that is a loaded question and most of the time it will depend on your
timeframe as a Buyer as well as how patient you are with the short sale process.
Short Sale Disadvantages :
Did you know that just because the Listing price is a certain amount it doesnt mean that the Bank will accept the agreed to terms of the contract?
Bank approval of a Short sale can sometimes take up to 90-120 days where as Bank Owned Homes are much faster to get an answer.
The Loss Mitigation reps will typically have 100's of cases assigned to them and are typically overwhelmed by the volume of files that they are working.
It is not unusual for a Short Sale to take six to 9 months to actually close verses a Bank Owned Home of around 45 days.
The Lender will require a hardship letter from the Seller as well as numerous other financial documents including Bank Statements, W2's, Tax returns and other supporting documentation. Most of the time the Lender will not even look at any of this paperwork prior to an offer being sent to them. This is part of the problem with dealing with a non approved Short Sale.
The Lender will typically not do any required repairs and the seller may not be in the position to be able to afford them either, so if the Buyer wants to continue with the deal they may have to be the ones to pony up to meet their lenders repair requirements.
My advice for a quicker close would be to only seek after approved Short Sales where the Bank has already agreed to a purchase price or find a Bank Owned REO home which typically can close in 45 days or less depending on how long your loan takes.
Bank Owned Home Advantages:
Some Bank Owned Lenders will offer incentives to Buyers purchasing their homes such as HUD Homes which offer a $100.00 down program.
Fannie Mae and Freddie Mac will offer incentives off and on such as closing cost assistance and a extended home warranty. Sometimes they will even offer new appliances. You can go to their website to see what current offer is or just call me for details.
The close of escrow and approval time is way faster and Bank Owned REO homes sell at a reduced price as well.
In some cases with Bank Owned Homes, major issues have already been resolved if there were any major repair issues and Bank may be willing to remedy issues to make the transaction close.
You are dealing with the Bank as the Seller instead of with the Seller and their Mortgage company on Short Sales which gets more complicated.
There is such a huge inventory of Bank Owned homes in Gilbert and the Valley in general that most buyers opt for purchasing a Bank Owned home instead of a Short Sale because they do not want to wait to see if they may or may not get Lender approval on a Short Sale.
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