Short Sale vs Foreclosure

For Sellers:

My most rewarding specialization is in representing sellers in short sale transactions. A short sale is where the seller's lender allows the property to sell for less than what is owed on the property when the seller has experienced a hardship such as loss of a job, death of a spouse, or another life changing event. Short sales are VERY common since they typically cost a lender much less then would a foreclosure. Short sales are also a much better path for a seller then is a foreclosure when you look at a side-by-side comparison. One of the biggest complaints buyers have with a short sale transaction is in the length of time it can take to close the transaction if the "listing" agent is not well educated in the process. I've undergone rigorous training and have achieved the CDPE (Certified Distressed Property Expert) certification, the premier distressed property certification in the industry and have a proven, streamlined process for navigating the short sale transaction. Why is this portion of my business model the most rewarding??? Simply stated: The feeling a client has when they are saved from what they felt was an unavoidable foreclosure and it's inherent costs. I have not found a better way to create a loyal, life long customer base then through offering them the tangible benefits of a short sale.

For Buyers:

In the market today many new and seasoned homes buyers are looking for that good deal. Many times a short sale (where you are purchasing a home in default prior to it going into foreclosure) is a better way to go than an REO or foreclosed property. Buyers who want a good deal in real estate invariably think first about pursuing foreclosures, however, after a home has been foreclosed upon it might sit vacant for many months before it is processed and placed back on the market, leaving it vulnerable to many perils (vandalism, leaks, pests, etc.) that would normally be recognized and remedied quickly by a homeowner.

If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction often offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.

Bank-owned (REO):

If the lender takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender will usually want to re-sell the property to recover the unpaid loan amount. The lender will then typically clear the title and perform needed maintenance and repair; however, the potential bargain for these REO homes is typically less than a pre-foreclosure or auction property. If you're interested in buying foreclosed properties, I'm a Freddie Mac HomeSteps Selling Agent and can assist with the process.

Before you buy

You'll need to make sure you're armed with the foreclosure data you'll need to find and buy foreclosed homes. You can start by searching a foreclosure listings database, which includes pre-foreclosure and auction properties across the country and a nationwide bank foreclosures list. Last but not least, if you're not a "cash" buyer, make sure you completely understand your credit score and optimize your credit. 

 Give me a call to find out more!  -Bill Ahls