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San Diego Foreclosures and Short Sales

San Diego Foreclosures and Short Sales

Home ForeclosureThere are two types of distressed homes in today’s San Diego real estate market. These are bank owned foreclosures and short sales.

Bank Owned Foreclosures – These are homes that a lender has foreclosed on, and which they now hold in their inventory. They are listed with a Realtor and placed on the MLS where they are sold along with every other home. Buying one of these homes is typically different in a few ways.

There is increased competition and multiple offers on many of these homes. The banks typically list their inventory for 10-15% less than the market. This has the affect of creating ‘buzz’ and generating a great deal of interest.

There are often no counter offers. If they bank has an offer higher than yours, they will automatically take the higher offer and will not counter you. When bidding on these homes, it is suggested that you bid your ‘highest and best offer’ first since you may not get a second chance.

Time frames are often tightened up by the bank’s addendum. Banks may reduce the 17 day contingency period to 7 or 10 days. In addition, almost all bank contracts will charge buyers a daily penalty if they close the transaction past the due close date.

Lastly, these homes are sold ‘as is.’ The banks typically will do no repairs.

Short Sales - are sales from a seller who is ‘upside’ in their property value. The seller owes more on the property than it is worth when they sell it. These sellers must go to their lenders and ask if they can sell the home ‘short,’ that is, for less than the note they have on the home.

These sales have similarities to foreclosures, but some important differences, as well. Similar to foreclosures, the banks are really in charge of the transaction. The banks determine the time frames, the purchase price, and all other terms of the sale.

What is significantly different from foreclosures is that these take a very long time – anywhere from 3 – 6 months on average. There is a complicated process whereby the seller must submit their financial documentation, the banks order their own appraisal, and take each file through several layers of review. For the buyer, this can mean months of waiting for the file to be ‘approved’ by the lender. Only then will the buyer know what the ‘approved’ sales price will be.

I am well-versed in both types of sales, and certified by the National Association of Realtors as a ‘SFR.’ This designation means that I have taken specialized training in foreclosures and short sales. I possessive experience with helping buyers purchase a foreclosure, as well as assisting sellers with their short sale.

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· Listing information deemed reliable but not guaranteed