Foreclosures & Short Sales
If you have been sitting on the fence waiting for the right time to buy, that time is now!
There are a variety of types of distressed properties you can look at:
- Short Sales (Pre-Foreclosures)
- REO (Real Estate Owned Properties owned by the Banks)
Trustee & REOs
Are you frustrated with purchasing all of those Foreclosure lists only to find out that it is mostly full of Pre-Foreclosure properties? Doing a lot of research and spending countless hours trying to find that "deal"? Sure. You can make some money working on the pre-foreclosures and trustee sales, but the time, pain, aggravation AND potentially risking your investment can be staggering. Did you do all of that work? Contacted irate homeowners who are not only upset that they are suffering financially, but now everyone out there seems to know and strangers are calling them constantly to try to buy their property. Perhaps you continued your research and saw that the property is finally going to sale and then, once again, after all that work you discover that, at the last moment, the homeowners were able to get the money they needed to keep the property.
Or...perhaps after all your research you find out that there were hidden liens you weren't aware of? Or...when you finally walked into the property you found out that there is a tenant still residing in the property and now YOU may have the fun and legal responsibility to get the person out? How about the fact that the previous owners were so upset at losing their home to foreclosure that they ripped out doors, lights and caused alot of damage which now YOU get the joy of paying to repair? And so much more fun to behold...
Did anyone tell you about those enjoyable parts of the process? Many experienced investors will tell you that there is a lot of time and risk involved in working on distressed properties. And even these investors lose sometimes. If you are looking for this kind of excitement you will enjoy it, but most people don't.
Short Sales provide an opportunity for you as the Buyer. There are often more Short Sales to choose from than foreclosures. However, you must be patient and recognize that there may be multiple offers on the property and that the process can take a long time. I've seen Short Sales take between 2 months to over 1 year before the process is completed. Often buyers get frustrated that they may have to wait 2-4 months for a Lender to decide if they are going to accept their offer. It all depends on where they are in the process. If there are two (2) Lenders on the property the second mortgage holder may decline to accept a Short Sale offer and the process could start all over again. Home Inspections are often for Informational purposes.
A Trustee Sale is when the Seller has decided to walk away from the property and the property has gone into Foreclosure. The Lender has determined a date for the Trustee Sale at the Court House steps. Often the Sellers may cure their loan right before the sale and the Trustee Sale is cancelled or the Lender has agreed to accept a Short Sale offer on the property.
These can be some of the most frustrating properties to work with. There are companies that sell Foreclosure lists and Buyers have spent alot of time researching to determine whether they want to buy. Often you cannot enter the property prior to the Sale date unless you've been able to coordinate this so you have limited information.There may be hidden liens that you won't know about unless you pay for a full Title search and even then there may be a lapse in some information. There are professional Investors who attend the Trustee Sales and even seasoned Investors will tell you that this is the riskiest transaction. So...you really need to do your due diligence here.
REOs are Sometimes Referred to as Foreclosures
Sometimes you will hear about a foreclosure property, but it is actually an REO. These could be good properties to consider. An REO means that a borrower has actually gone through the foreclosure process and the bank was unable to sell it at the Trustee Sale. Now, the Bank owns the property and must market it for sale themselves. They realize that they have to consider taking a loss on the property and have turned it over to a Real Estate agent to sell on the open market. What is good about buying an REO is that the property is vacant. Sometimes the Investor will make repairs, but not always. The Lender will often make a decision relatively quickly...within a few days to a couple of weeks. The downside is that, often the Home Inspection you may want to do may only be for Informational purposes and you may not be able to ask the Lender to make repairs. REOs generally move very fast and receive multiple offers so you may want to evaluate the property and consider if you want to offer a price higher than the list price since you may be competing with other buyers. Sometimes a Lender will even help you with closing costs, but remember...the Buyer who is willing to pay the highest and not need any help is often the Buyer the Lender will prefer.
If you want to really find the best distressed property I can help you
if you qualify as a VIP Buyer.
You have a unique opportunity in the current market to find a home at a reasonable price...below market and usually below the tax assessed value as well.
In a foreclosure the Sellers lose the most. They've lost their home. Their credit is ruined for a number of years. And the Bank can still go after them if they want to collect any outstanding money that may still be due to them if the Bank can't recover all of their money at the sale via a Deficiency Judgment.
In a Short Sale, although the Sellers are still losing their home, this approach gives them an opportunity to be able to start over again sooner and, if it is negotiated, without having a Bank come after them later to collect any outstanding money. You are actually giving them another way out so you are less apt to have the same types of problems with a short sale (e.g. trashed home and tenants still living on the property) than you could in a foreclosure.
Become a VIP Buyer!
If you want to get find the best property for you, ask us how you can become a VIP Buyer where we will partner with you and do alot of the research for you and help you find the type of home you want, call us. We will show you how you will save time...money...and aggravation and find the right home for you in the area of your choice.
Call Jan Allen at: (703) 476-2137 for a confidential,
complimentary consultation now.
This market too shall end so don't wait too long.