Many of you have recently heard all the news about short sales, foreclosures and preforeclosure sales. I've gotten a lot of questions on what these are, what it means for buyers and sellers and how does it effect the market. The other question is, can I buy a foreclosure at a good discount and build some equity.
Short Sales - this means that what is owed on the house is more than what the home is worth today i.e. what a buyer will pay for your home. In this scenario, the bank will have to accept a "short sale" as in, a bank is willing to take a loss on the home (or, in layman's terms, the bank is going to take it "in the shorts"). Short sales can be a good investment but they are also very complicated and not time sensitive. Since we have to get the bank to approve a short sale, the offer acceptance from the bank can take anywhere from 2 days to 2 months. This type of purchase is only for a buyer that places the value of the investment over the fact that the purchase will be a home. Short sales are also for buyers that can wait for the bank to respond back and move into a home whenever it's ok for the bank. This can take days, weeks or in some instances, months.
Preforeclosure - this is a home sale that is about to go into foreclosure. In this scenario, the sellers probably haven't made their mortgage payment on the house for a few months and if the home isn't sold soon, the lender will take it to auction. Preforeclosure sales are sales that are one step before a foreclosure sale. Many times, the preforeclosure sales are also short sales.
Foreclosure sale - the only real foreclosure sale is at an auction. In most cities, the auction occurs on the courthouse steps and an auctioneer sells the home to the highest bidder. In some instances, the home is sold for the mortgage amount, other times it's sold for above the mortgage amount (in which case the seller that had their home go into foreclosure gets the profits from the auction) and in today's market, the home is usually sold for less than the mortgage amount.
Lender owned homes - these are homes that went to foreclosure auctions and either no one bid on the home or the bank was the highest bidder and now owns the real estate. If the bank is the winning bidder, they usually higher a realtor to sell their home using the MLS system. In most cases, the homes are sold in an "AS-IS" basis where the seller won't make any repairs.
I've represented buyers and sellers in all of the above scenario. If you are a buyer that is looking for a home that fits this scenario, than call me and let's start to work on finding you a home. If you're a seller heading towards foreclosure or it's going to be a short sale, call me and I can help you understand and manage through the "short sale" sales process.
Tammy Seymour Realtor, ABR Prudential American Associates www.tammyseymour.com tammy@tontohills.com 480.586.0377
Real Estate Agent, specializing in short sales, pre forclosures, and bank owned properties in the Cave Creek, Carefree, Scottsdale, North Phoenix, Tempe, Chandler, Mesa Area
1 comment:
Many of you have recently heard all the news about short sales, foreclosures and preforeclosure sales. I've gotten a lot of questions on what these are, what it means for buyers and sellers and how does it effect the market. The other question is, can I buy a foreclosure at a good discount and build some equity.
Short Sales - this means that what is owed on the house is more than what the home is worth today i.e. what a buyer will pay for your home. In this scenario, the bank will have to accept a "short sale" as in, a bank is willing to take a loss on the home (or, in layman's terms, the bank is going to take it "in the shorts"). Short sales can be a good investment but they are also very complicated and not time sensitive. Since we have to get the bank to approve a short sale, the offer acceptance from the bank can take anywhere from 2 days to 2 months. This type of purchase is only for a buyer that places the value of the investment over the fact that the purchase will be a home. Short sales are also for buyers that can wait for the bank to respond back and move into a home whenever it's ok for the bank. This can take days, weeks or in some instances, months.
Preforeclosure - this is a home sale that is about to go into foreclosure. In this scenario, the sellers probably haven't made their mortgage payment on the house for a few months and if the home isn't sold soon, the lender will take it to auction. Preforeclosure sales are sales that are one step before a foreclosure sale. Many times, the preforeclosure sales are also short sales.
Foreclosure sale - the only real foreclosure sale is at an auction. In most cities, the auction occurs on the courthouse steps and an auctioneer sells the home to the highest bidder. In some instances, the home is sold for the mortgage amount, other times it's sold for above the mortgage amount (in which case the seller that had their home go into foreclosure gets the profits from the auction) and in today's market, the home is usually sold for less than the mortgage amount.
Lender owned homes - these are homes that went to foreclosure auctions and either no one bid on the home or the bank was the highest bidder and now owns the real estate. If the bank is the winning bidder, they usually higher a realtor to sell their home using the MLS system. In most cases, the homes are sold in an "AS-IS" basis where the seller won't make any repairs.
I've represented buyers and sellers in all of the above scenario. If you are a buyer that is looking for a home that fits this scenario, than call me and let's start to work on finding you a home. If you're a seller heading towards foreclosure or it's going to be a short sale, call me and I can help you understand and manage through the "short sale" sales process.
Tammy Seymour
Realtor, ABR
Prudential American Associates
www.tammyseymour.com
tammy@tontohills.com
480.586.0377
Post a Comment