Regardless if a property listed is a short sale or a bank owned property, there are great deals on homes in Palm Desert as well as other cities of the desert like La Quinta, Indio, and Rancho Mirage. Buyers have an amazing opportunity to purchase homes right now!
Palm Desert Foreclosures vs Short Sales
What is the difference between bank owned or foreclosed property listed for sale versus short sales in Palm Desert? I will describe a few distinct differences between the two types of sales but first let me start with sharing two of the latest sales in Palm Desert.
The highest priced short sale that sold during the last six months in south Palm Desert with a pool (not in a gated development) was 73273 Salt Cedar St., Palm Desert, CA 92260. It sold for $665,000 and was listed at $665,000. It was on the market for 390 days and was originally listed at $920,000 when first put on the market.
The highest priced REO home sale with a pool in south Palm Desert during the last six months (also not in a gated development) was 73751 Shadow Lake Dr., Palm Desert CA 92260. It sold at $415,000. It was on the market for 23 days and was listed at $424,900.
There are a couple differences you may have noticed between the two sales above but let me point a few particulars out:
1. The listing price of a bank owned home is set by the seller (the bank) so you know what the seller is willing to take - I know he will take the listed price. However, with a short sale the listed price is usually set by the listing agent and is often not pre-approved by the seller (the lien holder.) Therefore short sales can be a little unpredictable and even if you offer the listed price, it doesn't always mean the lien holder will accept it.
2. I'm sure you noticed the huge difference in the original list price of the short sale from the final sale price. This reiterates that the listed price on a short sale is not guaranteed and the listing agent often has to prove to the lien holder that they have achieved the highest price possible for the market. This is accomplished by listing the home at a higher price and doing gradual price reductions until an offer is brought to the table. The listing agent can also provide the lien holder with comparable sales to show what the value should be.
3. How about the 390 days on market for the short sale versus 23 for the bank owned? Often the first buyer who puts an offer in on a short sale does not stay interested long enough for the lien holder to approve the sale. Consequently the listing will be put back on the market several times before coming to a successful close.
4. With a foreclosure, the bank will normally respond to offers within 2 - 5 business days with either an acceptance form, highest & best form or a counter offer. In a short sale, you will have to wait at minimum two weeks for the lien holder to give any response and if you get a response within two weeks you are doing extremely well.
Buyers can find good deals with both foreclosures and short sales in Palm Desert. However buyers need to have the patience for a short sale to work. Short sales can and do work if the buyer is dedicated to the home and has given a reasonable offer for the market. In either case, it is important to work with an experienced agent who knows the right questions to ask up front so that you can be insured a smooth & timely transaction.