Phoenix Urban Living News. Real Estate In Phoenix Arizona

Phoenix Foreclosures, REO, Short Sales, Homes

Real Estate Short Sales and Bank Owned (REO) Property Sales are Hot!

Let Bette Zerba can show you EVERY foreclosed, REO Short Sale home availble for sale throughout the Phoenix metro area. These home MOVE FAST, so best to contact Bette today to help you negotiate the best price for these fast selling homes. Call 602-791-1766 today! Visit www.freephoenixmls.com

According to RealtyTrac, properties facing foreclosure action in December 2008 increased by nearly 60%, compared to February 2007.

What is a Real Estate Short Sale?

A Short Sale in Real Estate is when real estate is sold for less than what is owed to the seller’s lender. Short Sales must be approved by the seller’s lender, which typically occurs only after several months of missed payments by the property owner.

Short Sales most commonly occur where there is little to no chance of selling the property in an ordinary fashion to fully pay off the mortgage and related selling closing costs. This often arises in stagnant or depreciating real estate markets where the borrower/property owner purchased the property with little to no money down and thus has no equity in the property, and has not owned the property long enough to pay off a significant portion of the mortgage balance.

Short Sales are also known as Pre-foreclosure sales, because the property that is sold via Short Sale is facing foreclosure, but is sold to a new owner at a loss to the bank, before foreclosure is completed.

Short Sales are usually handled by a licensed realtor, who lists the property in the local MLS, markets the property, and negotiates between the buyer and the bank.

Since the proceeds from a short sale are insufficient to cover the mortgage, and the lender is assuming a loss, the seller receives no proceeds at closing.

Why participate in a Real Estate Short Sale?

Short sales can be a win-win-win solution for all parties involved: buyers, sellers, and lenders.

Buyers can purchase property at a substantial discount, often significantly below market value. These cost savings are attractive to owner occupants and real estate investors alike. Many real estate investors purchase short sale properties as long-term rental investments, or to remodel and resell at a profit. Short Sale purchases can be more desirable than buying at Sheriff Sale after a foreclosure takes place: a buyer can enter and inspect the property, which is often not the case with Sheriff Sale.

Sellers can sell their property and avoid foreclosure on their credit reports. A short sale will cause significantly less damage on a seller’s credit report than a foreclosure, which will remain on a seller’s credit report for at least seven years. Due to current market conditions and the fact that many recent homebuyers purchased their homes with little or no money down, a short sale may be the only way to sell a distressed property prior to foreclosure.

Lenders can reduce their losses and risks compared to foreclosure. Foreclosures are costly and time-consuming. Foreclosures may yield less proceeds than anticipated. Moreover, vacant, foreclosured homes face the risk of vandalism and burglary, while holding costs such as property taxes and property upkeep continue to mount with time.

Bank Owned (REO) Property
 
Bank Owned (REO) property is property owned by a lender as a result of completing the foreclosure process.

Bank Owned (REO) properties are usually handled by a licensed realtor, who lists the property in the local MLS, markets the property, and negotiates between the buyer and the bank.

Differences between Short Sales (Pre-Foreclosures) and Bank Owned (REO) Property

Both options can be attractive options for the owner-occupied homebuyer and real estate investor to purchase real estate.

Short Sale buyers typically realize larger savings that Bank Owned (REO) Property buyers. However, it may take many weeks or several months for a lender to approve a short sale offer. During this wait period, a stronger, competing offer may be presented to the lender.

The Bank Owned (REO) Property sales process is about as fast as a conventional real estate purchase. Lenders typically respond to written purchase offers within 48 business hours. However, the savings realized may be less than short sale purchases.

Both types of purchases enable a prospective buyer to enter and examine the property, unlike the foreclosure sale at auction.

Let Bette Zerba can show you EVERY foreclosed, REO Short Sale home availble for sale throughout the Phoenix metro area. These home MOVE FAST, so best to contact Bette today to help you negotiate the best price for these fast selling homes. Call 602-791-1766 today! Visit www.freephoenixmls.com