Hello. There seems to be some number of good properties being listed by brokers as short sales. What are some of the "gotchas" and risks regarding short sales? Do these have less risk than foreclosure? Any other good resources to learn on how to buy into these? I am not an expert on real estate, so any information from experienced real estate investors/buyers would be helpful. My understanding is - - can take many months to close - fees for inspection certification - broker fees[?] Thanks
I've bought a few short sales. In a foreclosure sale usually the property is empty as the owner has vacated and the condition can be anywere from good to horrible as the owner left it and could care less. It might even be stripped of appliances and light fixtures so it needs to be checked well before a bidding price can be destermined. A short sale is usually set up by the present owner and the bank under the $ what is owed on the mortgage. Lets say I owe 200k to bac but its only worth 160k. i'd go to back and ask if they'll accept 160k for it. The idea behine a short sale is supposedly its not is bad on there credit and the bank would much rather do that as the present owner is more motivated to sell it than it would be if its foreclosed and hopefully the present owner has taken better care of it.as you said the problem with a short sale is it can take months to get an answer I they'll allow you to sell well under whats owed and many people will bid under the short sale price and thus it must be resubmitted to the bank to see if they'll take and that can take up to many months. I actually bought a short sale when the original bidder walked as it took so long to get an answer and I paid the asking price were people who bid against me went under it and lost out
I did some more research and it also looks like those prices that are listed by real estate agents may be phony offers, and the real offer is well above what is quoted. Or even if the real estate agent posts an offer the bank can still reject it and counteroffer much higher. What is the market like for shortsales in 2013? is it a buyer's market? i would think so with prices flat for the last couple years. Is there a real concern about probable hidden damage to the property? I understand these properties are sold as is and the prior buyer might have sabotaged the property to some degree. When bidding on these properties I'd want to make sure I get a price that reflects the discount to potential hidden damages... Can I rely on the inspection to discover these things? Thanks - Also is it possible to bid on a couple of properties and finally close on 1 and cancel the others because it took so long? For example, bid on 5 properties, and ten months later I finally close on 1, then I want to cancel the other 4.
Dividend on forecloses yes sometimes the price is set low to get multiple bids that gets much higher bids.as far as foreclosures on the court house steps it's as is with no inspections. I bought my homes in 2010-2011.foreclosure list in hot areas is very slim and prices way off the bottom. Sure real estate could head much higher but the great deals long gone .
HJey hafez, how did you determine a bid price? Also what area are you in? I know a lot of bust areas in the sunbelt still have prices pretty low compared to in the bubble.