There are many more bank-owned properties in the region these days than we’ve ever seen before. The banks don’t want to own homes and are usually quite motivated to sell them. When buying a bank owned property understand: a. It can take time for the bank to respond to the offer. b. The bank will have you sign their own documents prepared by their battery of attorneys that serve to protect the institution, and only the institution - the last one we did had a 16 page addendum of bank-protection language. c. You will need to inspect the property to your own satisfaction. d. They aren’t too flexible after the contract is signed so be sure to be very specific in your offer as to what you want, when you want it, and how things are to be done.
The Short Sale process is more ambiguous, but generally the property is in better condition as the owners are still living in and maintaining it. Most lenders are now recognizing the benefits of cooperating with agents in the Short Sale process and are doing so. When buying a Short Sale property understand: a. The Seller’s agent must provide specific information to the lender when submitting the offer – make sure the Listing Agent knows this and is prepared to do so. b. If there is a Second Deed of Trust there may be delays caused by the Second lender, if a different entity than the First. A Second lender can even kill a sale entirely leaving foreclosure by the First as the only alternative. c. The status of a Notice of Default, or lack thereof, can have a bearing on lender motivation to cooperate. d. You should inspect the property, however you will have good knowledge of its condition and maintenance status from a willing Seller in this process.
Our Advice: Don’t underestimate the motivation of Sellers that aren’t in a distressed situation. Their motivation may be dominated by other than financial factors. The timing and terms of your offer can be more important than price to the right Seller. Whether you buy from the bank, get the right short sale situation under offer, or buy a well priced home in a conventional manner, weigh the process against your objectives – what type of home you want to buy, when you want to close escrow, and what obstacles can you tolerate emotionally, financially, and time-wise. Your agent can help you evaluate each of these owner situations and how you can best achieve your personal objectives in each of them.
These are exhilarating times in the real estate industry. Buyers have many opportunities for good buys if they are willing to put in the time and study necessary to effect a good buy. Short Sales, Bank-Owned property, and foreclosures aren’t the only way to make a good buy … consult your professional agent. Experience is Priceless!