Short Sale/Preforeclosure/Forclosure questions and tips on negotiating the price
My girlfriend and I are both first time homebuyers and we are currently renting a location. Our lease is up come October 1st but we agreed to let them put the house up for sale July 1st so we need to get moving on the whole purchasing a home. We have found homes on realtor.com which of 90 homes we like they are probably all short sale, pre/foreclosure. What are the main differences between each of these? Obviously we do have time which I know these take lots of time to go through. We do have a realtor but I want to do my own leg work so I understand the differences between them. Also what is the general rule of thumb when bringing in offers to the table? Couple thousand? Couple percents? We have put a limit of apx. $175k but can we look over that and if so what kind of prices do we bring to a table. Any help or advice on how much we should ask or based on your experiences in working with S.S or foreclosure how big of a discount you can get on a home.
Thanks,
Eric.
Short sales typically take much longer to negotiate and close, compared to a bank owned foreclosure. Every situation is different depending on how long the home has been on the market , has the paperwork started between the seller, bank, attorney and realtor etc.? All these factors come into play with these scenarios and many others. If you are planning on taking advantage of the $8000 Tax credit this year, you better get a move on. You must close on this home by November 30, 2009, and with closings taking 90 days plus you are running short on time.
Hello Eric:
There isn't a difference between Short Sale/PreForeclosure or Foreclosure. Most major lenders will take up to 12% less than the fair Market value of a home. They will send at least one (usually two) appraisers to verify the Fair Market Value.
William Squires
Coldwell Banker Primus, Algonquin
http://www.WilliamSquires.com
HI Eric,
The biggest difference betweena short sale and a forclosure is time. A forclosure is owned by the bank already and can respond to offers quickly. HOwever many times the utilties have been shut off and the homes are in tough shape. A short sale can take 8-10 weeks to get an answer to your offer and there is no guarentee they willaccepte it. However many time the homes are in better shape and utilties are still on. As far as what to offer that really depends on alot of circumstances, condition market time etc. You should have your Realto pull comps so you know what other properties are selling for and use that as a guide since those are the same things the bank is using to set the price or to decide to take your offer. Otherwise if you dont mind writing offers, you could write on everythign that you like for 20% under asking and see where it goes. But know that this is very time consuming and can be frustrating have ing to wait all the time for an answer.
Larry Lang, ABR, GRI, Broker Associate
Realty Executives Cornerstone
815-477-3000
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