Short Sales and Foreclosures, a scary transaction?

I was thinking about this blog, and my next post, and it hit me after showing property to buyers where most of the homes we saw were either bank owned or short sale . . . these don’t have to be “scary transactions”!

Typically when a buyer hears “short sale” they immediately look at the home and think “No way, that’s not for me”, sometimes this is the case; but not every time!  I think the biggest misconception for a buyer is that a transaction is tougher, or impossible to bring together.  This is not the case! When dealing with a Seller working on a short sale, buyers must remember that it is the seller that must bear the work load in this transaction.  A seller must work with their lender and prove that there is a hardship to get a short sale approved.  There is little extra that a buyer must do, other than be patient.  Sometimes it can take a very short period of time, or very LONG period of time before the lender finally approves a short sale.  If, during that time, a buyer finds a new house and wants to move on, make sure the language in the current contract covers the earnest money deposit, and allows a buyer to withdraw.

As for foreclosures, are these scary transactions?  No!  In fact, lenders are interested in selling property.  They may not be as “negotiable” as your friends may have said.  I’m sure everyone has heard “Offer the bank half of the list price, they’ll be desperate to take your offer!”  This is rarely the case.  When a lender receives a property through foreclosure, many people provide values, appraisals are done and the lender decides what the list price will be.  When it comes time for a buyer to make an offer, often times a lender will actually offer incentives most regular sellers can’t!  Getting a contract signed will typically take a little longer and the process is a little different than an arm’s length transaction, however, typically it is not incredibly difficult to work with a corporate owner.