By now everyone has heard the terms “bank owned” AKA foreclosures and “short sales.” What is the difference? Bank owned properties is where the bank has taken the property back from the owner; the bank now owns the property. A short sale is where the owner still owns the property but is hoping to get cooperation from the bank to be able to sell it at an amount that is less than the owner owes. On a short sale, the bank has FINAL approval as to what they will be willing to sell the property for.
When submitting offers to bank owned or short sale properties – the buyer will have to submit a proof of funds letter, if paying cash or a pre-qualification letter, if getting financing. This is a requirement from the bank.
Dealing with a bank owned property, will get a quicker response than dealing with a property being offered as a short sale. When a seller decides to deal with a short sale, they will be required to submit an abundance of paperwork to the bank – such as tax returns, pay stubs, hardship letter, monthly expenses, statements and the list goes on. The negotiator from the bank, will not even look at the file until all the paperwork is submitted. Once the negotiator receives the paperwork, then they have to follow the bank’s procedure to see if a deal can be made. Each bank has their own set of guidelines but what they will all do is order either a BPO (Broker Price Opinion) and / or an appraisal. Once the bank is armed with the information as to what the market value is – then they will start negotiations. This is the reason short sale properties take a few months to close.
Since the recession started in 2006 (for down here) – the banks have greatly improved their short sale process. So all though they can still be painful, it has become easier – IF you are working with a qualified short sale specialist.
When it comes to the listing prices on a short sale – the listing agent generally sets the price as to what they feel the market value of that property is. So don’t be confused to thinking that is the most you will have to pay from the property BECAUSE the bank will have the FINAL say as to what a property sells for.
If you find a property that you like, now is the time to buy it. NO FLIPPING – this is not the time for that. Long term users are who is purchasing now.
Good luck with your search. My website is updated on a daily basis – so if you like what you see SAVE IT IN YOUR FAVORITES! or BOOKMARK IT (from one Mac user to another)! My website is updated on a daily basis, extracting information from our local multiple listing service (MLS). Whether you are looking for Florida Keys waterfront homes, Luxury homes in the Florida Keys, Florida Keys Condominiums, Homes in the Florida Keys, Vacant Lots or Commercial properties– my website is the source for all your needs.
The Florida Keys are 106 miles long – if you know which area you would like to purchase a Florida Keys home you can narrow your search. There is the Upper Keys – which is Key Largo and Islamorada; the Middle Keys – which is Marathon; the Lower Keys and Key West.