REO (FORECLOSURES) AND SHORT SALES - TIPS

Short Sales (Pre-foreclosure Properties)

FOR SELLERS:  If you are a homeowner who has gotten behind on their payments, and has thought about just letting your home go into foreclosure, please realize there are other solutions.  A short sale may be a good option for you.  A short sale is when the lender agrees to accept less than the mortgage amount owed by the homeowner.   A short sale may have LESS negative effect on your credit than a foreclosure.  Lenders, rental companies, employers and even the military could use the credit to make decisions about your future.  You may be able to get that new home, new job and your new life FASTER and EASIER!   Give me a call and I will be happy to talk with you about available options.

FOR BUYERS:  If you do not have to be in a home immediately and have some patience, these properties can be great buys.  As mentioned above, a short sale occurs when the owner is "upside down", or cannot sell for the amount owed on the loan or (loans).  In turn, the bank is shorted and agrees to accept a lower amount.  The bank and the owner are able to get rid of a home and avoid the foreclosure process, the buyer gets a great deal.   Being the seller is short of funds, these properties are mostly sold in "as is" condition.

On average, short sales take about 40-60 days for a response and another 30 to close.  Of course each bank and situation is different.

Bank Foreclosures - also known as REO's (real estate owned)

IF YOU ARE A BUYER:  This could be a great buying opportunity.  Here are some things to keep in mind:  Bank foreclosures are usually priced under market value.  In many cases, this creates a lot of buying activity and multiple bids pushing the price up higher than asking.  It is very important to have your financing in place, or proof of funds if you are a cash buyer, so that you may move quickly to make your offer when the right property comes along.  Ask me about my "top of line" preferred lenders.   Properties are usually sold in as-is condition, and your ernest money may be non-refundable if you do not follow through with a purchase.

Special tip for owner occupants:  Pick up a good deal for a home that needs some work.  Most lenders require a substantial amount down on a home that needs TLC.  If a property is in need of some work, why not consider getting an FHA (203K) type loan.  All of your construction or cosmetic updates are rolled into the loan similar to a construction loan.  You must use contractors to complete the work.   A downpayment of 3.5% of the completed price is what's required just like a regular FHA loan.  (Certain lenders do better jobs with this loan than others.)

My real estate firm, Hines & Associates Realty, has an REO Division, and this offers me an opportunity to become aware of new foreclosed properties early in the process and offer other tips.

Here is an interesting site to check out REO bank owned foreclosures. www.gohoming.com.  You can even bid online but you have to have a Real Estate buyers agent to continue further.

Fannie Mae and Freddie Mac offer foreclosed properties.  Below are their links:

Fannie Mae Site:  http://www.homepath.com/   

With a Fannie Mae loan, Fannie Mae foreclosure properties can be purchased with a 3% down if you are an owner occupant and 10% down if you are an investor.  Did you catch that?  10% for an investor instead of the usual 25% down.  There is no appraisal required or no MIP (mortgage insurance).   Ask me about lenders for Fannie Mae home loans, as I have some great contacts for this specific type of loan.

Freddie Mac Site:  http://www.homesteps.com/hm01_1featuresearch.htm 

There's a lot to learn and keep in mind whether you're buying or selling any property.  That's why I'm here to be your guide and advisor.  I'm ready to assist when you need me!  Contact me at 704.579.1655 or email at susan@zongker.com.