There is a lot of confusion out there today regarding Foreclosures and Short Sales. You read about them, you hear about them. But for the most part, most media and newspapers do not understand what is actually involved, other than bits and pieces in a Short Sale or Foreclosure process. I am going to explain below what is actually involved in Short Sales and Foreclosures. There is certainly opportunity out there. It’s the difference between a Deal and a Steal. Not all Buyers will have the temperament or patience for a Steal. ------------------------------------------- BUYING 3 WAYS-------------------------------------------------------------------- THE OLD FASHION WAY - You see the home that you like and you put an offer in on it. I present it right away for you and hopefully we have an answer for you either that day or the next. An answer would be an acceptance, counter offer or outright rejection. The old fashion way gives you control of the property within a day or two in most cases. This is the normal way that we have always been doing Real Estate.------------------------------------- FORECLOSURES - You see the home that you like and you put an offer in on it. Since the bank owns the property, they almost always attach their Addendum to the contract that you must first sign before it can be submitted. The Addendum is always in the Banks favor and will sometimes contain penalties against you if it does not close on time. I then submit the offer to the Listing Agent who then forwards the offer to the Bank. In most cases, the Bank will get an answer back to us in 2 or 3 working days, and in some cases, it can take up to 1 to 3 weeks. During that time, the house stays on the market while other possible offers come in and or the bank could already be holding other offers when yours comes in. If the Bank decides to work with your offer, it will give you an answer of acceptance or counter offer (keeping in mind that they probably have other offers as well). You accept and you have bought a home. If it is a beater home, you have a good chance of getting the home on a lower than asking price. If it is a sharp home for the money, you will probably lose it to someone else if you don’t come in with a better than full price offer. This Real Estate market now offers far more Foreclosed properties than ever before and it is a great way to pick up a Steal----------------------------------------------------------- SHORT SALE - You see the home that you like and you put an offer in on it. Since the Bank does not yet own the property, there is a lot of time consuming work to be done. For starters, the Owner in some cases, will not be signing any contract with you to sell the house. The acceptance or rejection of terms will be decided between the Owner and the Bank. That means that you will not know if you have bought a home until all terms are worked out between the Owner and their Bank. This process takes approximately 10-13 weeks on average. In the meantime, other offers pour forth into the bank because again, the property in many or in most cases, does not come off the market. Approx 90% of short sales will never make it to closing. Why? And why so long? Here are some of the reasons, but not all of the reasons: 1. Sellers are not qualified for a Short Sale and many Realtors fail to ask Basic questions of the Seller concerning this. 2. Sellers will sometime mislead Realtors into thinking that they have the Money to cover the short fall between value and what they pd for it When in fact they do not. 3. Banks have different guidelines from each other and there is no uniformity 4. Banks will send out their own appraisers to make sure that the property Did not undersell 5. Banks will negotiate with their Sellers as what they will require the Owner To do. Not all Owners may cooperate with their banks demands. The Bank may want to attach what little assets that the Owner has. The Bank may want to have the owner sign notes, attach wages ect 6. The Bank in many cases may have to negotiate with 2nd and 3rd lien Holders as to what they will have to give up and other lien holders Quite often, will not give up And finally, you might ask, why don’t Banks and Sellers get all this done ahead of time? Because Banks will not, or cannot due to the heavy volume of foreclosures. The procedure for Banks and the Owner is this: Owner requests a short sale package, kind of like a mtge loan in reverse. Owner sends back the package to the Bank. And, that’s it. Nothing is done until a Sales contract comes in at which time, I submit it to the Listing agent as mentioned above. Short Sales are very lengthy and very likely that it will not be successful. Foreclosures are a much better way to go. IF YOU DECIDE TO BUY A FORECLOSED OR SHORT SALE PROPERTY, YOU MUSH HAVE A PRE APPROVED LOAN IN PLACE OR PROOF OF FUNDS IF IT IS AN ALL CASH TRANSACTION. Banks will not accept an offer without one on Bank Owned Property------------------------------------------------------------------------------------------- If any further questions on the above, I will be happy to help you with them. In the meantime, why not get into this Great Real Estate Game of Opportunity. Why not Contact me now, and Let Paul Symanski, Get you Started. ________________________________ Paul Symanski Click here to register.