Foreclosure in Gulf Shores>Question Details

Kevin Richar…, Home Buyer in Panama City Beach, FL

why so many short sale homes? is price negotiable? pro's and cons?

Asked by Kevin Richards, Panama City Beach, FL Sat Aug 28, 2010

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This is a trend that will continue. Banks are even coming out with programs that encourage short sales over foreclosure. The banks just don't want any more homes. With that being said, The price is negotiable to a point. Are you going to pick up a short sale at 50% of it value (HIGHLY unlikely) I don't like sayying never.....At the same time could you pick up a short sale 15-20% below market value.Yes. The pro's to a short sale is that most of the time the owner is still living and maintaining the property, whereas a foreclosure it is unknown how long it has been neglected. Cons. Sometimes Short sales can take a while.....You can read horror stories about a bank dragging them out for months. So if you need to move withing 60 days I would shy away from them. Hope that helps

Good Luck

Its a Good Life
Shane WIllis MBA, CDPE
1 vote Thank Flag Link Wed Apr 13, 2011
You will see more short sales hit the market because people are re defaulting on their loan modifications. Plus a program called HAFA started allowing the homeowner $3,000 cash back.

The price what you pay will be current market value. The banks order a broker price opinion, aka bpo to let them know how much the property is worth. They will then list it at that price and hopefully get some bites. If they don't then they will probably lower the price.

Now the pros of a short sale, is most of the homes are occupied, so you can have full disclosure of what maybe wrong since the owners still live there. With Bank owned properties, you have no clue.

If you pick up a regular sale or a flipper property, those are good too. But be prepared to pay a little premium since its already fixed up. The flippers tend to put the basics like new paint, new carpet, remodel the kitchen, front and back landscaping and put it on the market probably $15K more than what its really worth. They probably get away with it cause of the improvements they made, plus theres no hassle of dealing with the banks for approval. So people pay the premium.

ok, good luck with everything.

Sameer Punjani
Web Reference:
0 votes Thank Flag Link Sat Aug 28, 2010
The only pro in m y opinion in buying a short sale is getting a house you want at a better than market price. There are no certainties with a short sale. They can take months and never come to a successful conclusion. Lenders can reject a perfectly good offer based on faulty information or bad price opinions from other agents. There are even cases of lenders foreclosing on a home that has a short sale in progress.
I have been doing short sales since 2002 and close some every year, but when I'm working with a buyer I make certain they know full well the uncertainties and are willing to wait 6-9 months before starting to pack. One other benefit is that depending on how your contract is written, you can keep your eyes open for other properties while waiting for the lender to decide. If a better, non-short sale home comes available, you are in a position to make an offer on it and if successful withdraw your offer on the short sale property. It's painful to the listing agent and seller, but the lenders leave this door open by taking so long to provide an approval.
My general advice is find a home you love, short sale or not and be prepared to do what it takes to get it. Good luck in your home buying.
0 votes Thank Flag Link Sat Aug 28, 2010
Kevin short sales allow the seller to sell their home for what it is worth in todays market because they often owe much more than it is worth. A short sale can be a great deal if you have time and patience. Make sure you have a well experienced agent assisting you with the short sale. A coupel of tips is to make sure your agent assesses what the house is worth and base your offer on that, the bank will not accept offers much lower than market value. I have many tips listed in my blog, to see them all, please check it out.
0 votes Thank Flag Link Sat Aug 28, 2010
Hi Kevin,

Short sales are definitely a sign of the times in today's real estate market. Prices are definitely negotiable and ultimately you are negotiating with the lender who will determine how low they are willing to go. So make your best offer and the bank will counter if it isn't enough.

Best of Luck To You!
0 votes Thank Flag Link Sat Aug 28, 2010
Hi Kevin,
Short Sales are becoming more plentiful in real estate due to the sellers owing more on their mortgage than the properties can sell for today. Lower values nationwide have also affected beach values in Gulf Shores and Orange Beach. Prices may be negotiable, but ultimately, it is the bank that will have to respond to your offer and if it is too low based on an appraisal or market valuation they will order, they often counter with a higher sales price they will accept.

I am a Certified Distressed Property Expert agent in this area and will be happy to try to answer your questions if you would like to call me.

Teresa King
RE/MAX of Gulf Shores
0 votes Thank Flag Link Sat Aug 28, 2010
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