This post is just to answer a few questions I get.....repeatedly.
Homes for Sale (3 types)
1. Traditional Owned
The actual owner of the home, a real person is selling the house! This home comes with a disclosure statement (SPDS) of facts pertaining to the home. Also will come with a statement from the insurance company disclosing any claims that have been on the property the last few years. Repairs may be made from the seller. Customary/usual time frames for closing. These are currently few and far between.
2. Bank Owned
Also known as an REO or Foreclosure. This home is now owned by an entity, a business, NOT a person. They have not lived in the home and will not guarantee anything regarding the property. Sold AS-IS. No disclosure forms from the previous owner.
As I tell my clients .......you have 2 choices, take it or leave it.
3. Short Sale
A short sale is also known as a pre-foreclosure. More debt is owed against the property than the property's value. In this situation, the creditor(s) may be willing to agree to allow the property to be sold for less than the loan amount and /or accept less than (or short) the amount owed as payment in full. These properties are still owned by real people under hardship situations and will have a SPDS or Seller Property Disclosure Statement available. The owners usually do not have the finances to repair anything on the property and the home will generally be sold AS-IS.
I've also heard this described as where the Bank holding the mortgage is "taking it in the shorts".
These homes can take weeks to months to close! Buyers on a specific time frame to purchase may want to choose a different alternative. While short sales are pretty new to the market, they CAN be successfully closed. My advice when purchasing is to make sure the listing agent understands the process and has a successful track record closing short sales.
Any Questions? Give me a call.
