Short Sales / Bank Owned Properties
The greater Puget Sound real estate market was one of the last to experience the downturn that sent property values on a severe downward trend throughout the country. This market has been historically robust and analysts are predicting a strong recovery. Housing Predictor listed the top five cities for price gains over the next five years, and Seattle came in at #4, with an expected increase in prices of nearly 15 percent. With that being said, home prices continue to be negatively impacted by the sale of distressed properties. There are still many properties on the market today that are “distressed” or, “underwater” meaning that the amount owed is greater than the current value. These properties may be listed for sale as “short sales,” or “bank owned.”
If a property must be sold for less than the amount owed on it then it is a short sale. A short sale is often the preferred alternative to bankruptcy or foreclosure. Lender approval is required to sell a property for less than the amount owed. Short sale transactions are often lengthy and can be complicated so, it is essential that an experienced real estate broker is involved. My team has handled countless short sale transactions and currently has a proven closure ratio – we have never failed to negotiate a sale. With us, your short sale transaction is in expert hands and we will never charge additional fees for our services.
As a buyer, short sales can be an opportunity to purchase a property at an incredible price. One of the primary drawbacks, however, is time. Our team will negotiate your short sale purchase as quickly as possible. Again, we will never charge additional fees for our services. We have the experience and expertise necessary to cut to the heart of the process and fast-track your closing. Lenders, however, are often not as motivated to expedite the process and may delay approval especially if foreclosure of the property is to their advantage. So, although short sales are often appealing due to price, they sometimes take more time than the buyer is willing or able to spend on the transaction. For this reason, many buyers chose to pursue bank owned properties.
Bank Owned Properties
If a homeowner fails to make mortgage payments for a period of time, the lender can foreclose on the loan and attempt to sell the property at auction. If the property is not sold at auction then the lender retains the property and it becomes “bank owned” or “REO” which is short for “Real Estate Owned”. In my opinion, bank owned properties offer the best opportunities for buyers in today’s market.
Once a property is bank owned, negotiations are simplified. The price is approved by the bank at the time it is listed so, a buyer knows what the bank is willing to accept from the start. This makes the process much quicker than a short sale where the price approved by the bank may actually be higher than the listing price.
Buying a bank owned property, however, still demands the assistance of a real estate professional with experience and expertise in this area. Bank owned properties are often sold “as-is” so, buyers need to be careful and know exactly what condition the property is in. Skillful negotiation is also necessary in bringing these transactions together and you can be sure that the banks have expert negotiators on their side and so should you!