A Guide to Foreclosures & Short Sales
The three biggest differences between a short sale and a foreclosure from the stand point of a buyer of real estate today are...
1) In a short sale the bank does not own the home or condo, whereas in a foreclosure the bank is the owner of the property.
2) The time frame to complete a short sale is much longer than a foreclosure. In a condominium it can be even longer if there is past due maintenance owed to the condo association.
3) Usually the condition of real estate that has gone through the short sale process is far better than homes and condominiums that has been foreclosed on.
Please remember, in the real estate market there are exceptions to every rule but lets discuss these primary issues that distinguish foreclosures from short sales in the market we face today in real estate.
When the bank owns the property, a foreclosure, there is motivation to sell. Once the bank places the property onto the MLS, with a REALTOR the average days on market is five. Often a bidding war ensues and the average foreclosure often sells for at or above asking price.
In a short sale, the bank does not own the home or condo, and the goal is to get an offer in front of the bank, that makes sense in the current real estate market. Depending on the bank the process can take from 3 months, to well over a year. A REALTOR well versed in the short sale market can help to keep you away from the banks which simply are failing to embrace the process. The amount of sellers seeking this type of debt relief from home prices that have crashed has caused many banks to be simply overwhelmed with the process.
The last issue we mentioned above is condition. The foreclosure process can be long, as the court system is processing more than they were ever equipped to handle. The uncertainty of the process forces many homeowners to leave their home and move on with their lives long before the process is final. Why would anyone wait to witness the day they lose their home? In contrast many real estate owners stay in their home throughout the short sale process. The electric is on, the air conditioning is running, and they end result is a home or condo that has been cared for until closing day. In many cases this cared for home represents a better value to the buyer, who has had to be very patient throughout the long process.
For additional information contact us directly 954.383.8170 with any questions you might have about any real estate. We are here to help.