What is a Short Sale?

A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. 
If you owe more than your home is worth, please call us to inquire if you qualify for the short sale process.

A short sale requires the approval of the Lender(s), PMI company or government agency, (a third party).  The reason the third party must approve the terms, the purchase price & closing costs is because they will be accepting less money than what they are owed and paying the closing costs.  This all takes time & most negotiations are handled by the Listing Agent.  It is imperative that you have an Agent who is familiar with the short sale process & able to negotiate with the third parties.  We have experience with this for both Sellers and Buyers.  There is additional paperwork that must be submitted by the Seller to the Bank once an offer is accepted as well.  You don't want to get lost in the shuffle!

The Seller still owns the property, therefore, the Seller is the only person/persons whom can enter into contracts to list & sell the property, and is always subject to the third party's approval.

Most importantly whether you are purchasing or selling a home on a short sale, you must have patience.  When you submit an offer on a short sale it can take 3 - 6 weeks before you have a response from the Bank, sometimes longer. 
A Bank owned property, (REO), can take anywhere from 2 business days to several weeks to recieve a reply.

What is an REO?

An REO, (Real Estate Owned),  is a bank owned property, it is a property that the Lender takes back.  The Lender has unsuccessfully held a foreclosure/trustee sale, usually because nobody bid on the property, (because the property value has declined & lower than what is owed).  The bank starts the bid, (at the trustee sale),  with the loan amount owed to them, attorneys fees,  accrued interest  & other costs that were incurred because of the foreclosure process -- see how this can all add up!  If you win a bid you must have a cashiers check for the bank  and accept the property as-is; sometimes along with it's occupants & other liens on the property.

Once the Bank owns the property, they will change the locks, evict ocuupants if needed, sometimes clean up and do some repairs. The majority of Banks want to sell the property AS IS.  It is imperative, as a prospective Buyer, to have inspections on the property, and an inspection clause to get out of the contract in case something is found that could be expensive to repair or damaged to an extent that is irreversible.  Banks will allow you to make inspections at your own expense and sometimes will make repairs, so, before cancelling your contract, ask your Agent to submit a repair request.

Before making an offer on an REO property ask your Agent to contact the Listing Agent & ask if any inspections were done on the property and if the bank is going to make any repairs. 
There are other questions a Buyer's Agent should ask the Listing Agent as well. 

The Bank has usually had an appraisal done on the property and a couple Broker Price Opinions (BPOs).  Therefore, the  Bank is confident they have priced the property agressively. This is where our expertise comes in to help our Buyers determine what to offer.

Purchasing an REO or Short Sale property can be a good investment, if you are willing to put some hard work  and sometimes just a little tender loving care into the property. 
We have a list of tradespeople that are reliable and dependable.
Again, patience is a must.  The Banks do not respond quickly - your offer is reviewed by a team of Bank employees -  hired specifically to manage their REO properties.  The Bank will also require a specific Title Company be used, and sometimes the Title Company is so bogged down with REO properties, that the escrow process can be more timely and stressful than normal. 

If you are considering purchasing an REO or Short Sale home, please call us or click on the "Contact" or "Request Info" tab to email us.  We can set up a system to update you daily on the bank aquired homes new to the market.

If you are a Seller, and cannot make your mortgage payments, you may very well qualify for a short sale or loan modification.  Call us, or click on the "Contact" or "Request Info" tab to email us.