Its a Good Life
Shane WIllis MBA, CDPE
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.
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.
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!
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.
RE/MAX of Gulf Shores