Update
for the 2022
real estate market -:When
I created this page years
ago, bank owned (REO) and
Short Sale properties were readily available.
In the 2022 real estate market, home short sales are almost
non-existent. This is because the market price of homes in Orange
County, CA (and really, everywhere else also) have risen so
sharply that there are few home owners who are now upside
down on the value of their homes. I still get calls
occasionally from potential home buyers or bargain hunters who
ask if I can find a bank owned or short sale property that is
under-priced. I have to respond that, realistically, there are
few if any "bargain" properties on the market that
are selling as a bank owned or short sale properties. Bank
owned properties, if any, now sell at close to retail value,
as banks know they can get top-dollar in this market. The best
bet in bargain properties are usually "fixer"
properties that have serious issues and need lots of expensive
repairs. To answser their question, I have to regrettably let
the buyer know that they will not be able to find a bank
owned, a foreclosure, or a short sale home that can get for a
bargain or save them a lot of money. This a just the realty of
today's real estate market. While you are free to browse this
page, understand that there is little to no inventory in homes
that are selling as a short sale or bank owned.
In
real estate terms, a short sale is a type of transaction
in which the home owner is selling the property for less than
what is owed on the loan(s) (in other words, a shortage). This
must be done with the cooperation of the lender(s) who have to
agree to the terms of the sale. If in agreement, they will
issue a short sale approval and the transaction can be
completed. Despite the name, short sales and actually take the
longest to close. This is because of the requirement for lender
approval. The approval can consist of terms and conditions,
but also price. Lenders typically do their own appraisal or
BPO (broker price opinion). They do reserve the right to
increase the price if they feel the listing or offering price
does not reflect market value. While often a good deal, shorts can be complicated and confusing to buyers, so it is
important to work with a buyer's agent who is experienced in
working with these types of transactions. You can read more
about Orange County short sales, here: http://www.ronforhomes.com/articles/shortsale.htm
Residential
short sale listings
The
residential listing links below include short sale condos, town homes,
and single family homes. The links are listed by OC cities and
are in price sequence (low to
high). If you are looking for homes in a different area
of OC and it is not listed below, please contact me. I'll be
happy to send you a customized list. Search below to find a short sale condo in
Orange County.
This category
includes rental income properties, commonly known as of
duplexes, triplexes and fourplexes. These are also called multi-unit
or investment properties. Visit my main income property page,
here: http://www.ronforhomes.com/incomeproperty.htm
What
is the difference between a short sale, bank owned (REO), and
standard sale?
See
my web page here: http://www.ronforhomes.com/saletypes.htm This page will give you a good
understanding of the differences, plus will provide you with buying strategies.
Why
do these types of transactions take so long?
Generally
because of the time it takes to negotiate with lenders
and get their approval. In many cases there is more
than one lender involved in a sale and in order to close
escrow, all of the lenders have to issue approval letters. Many
lenders are back-logged with short sales and have small loss
mitigation departments. Because of this, it is typical for the
negotiations to take several months.
Are
there extra costs ?
There
can be. Because it is a distress property sale, buyers
sometimes have to pick up the cost of delinquent HOA dues or
property taxes, extra payoff to second lenders, or the cost of
the short sale professional negotiator. Also, these costs must
be paid outside of the loan, so be careful to
check for any additional or hidden costs.
Can
I make an offer lower than list price?
You
can always make a lower offer, but the sales price will
ultimately have to be approved by the lender(s). If you are
competing for a home with one or more additional buyers, you
may have to offer list price or higher in order to beat the
competition.
Why
do some short sale properties sell for higher than list price?
Short
sale list prices can be less meaningful than standard or bank
owned sales because listing agents sometimes list homes below
market value in order to attract offers. The lender may not
accept the offered price because they have usually asked for a
BPO (type of appraisal), which has given them an idea of the
property's true market value. In this case they will go back
to the agents and ask for a higher offer price.
We
looked at a short sale home that was listed as Active, but the
agent already had many offers on it. What is this all about?
This
definitely one of the most frustrating aspects about short
sales for many buyers and their agents. The issue is that many
agents do not understand that once the seller (not the lender)
accepts an offer, the home must be put into "Backuo
Offers" status or "Pending" status. Many listing
agents are under the impression that since the lender has not
yet approved the offer, they are free to leave the home on Active status. This is actually an MLS violation and I regularly
report listings that do this. The agent that leaves a home on Active status after he/she has submitted offers to the lender is
wasting everyone's time. They don't need additional offers and
it only frustrates buyers and agents who show the home,
because they are falsely lead to believe that they can still submit offers.
Any time you find one of these, urge your buyer's agent to
turn this listing in as a violation!
If
you have additional questions that were not answered here,
please feel free to contact me!
Are you considering a short
selling in lieu of foreclosure?
If
you have been considering a short sale as an alternative to a
foreclosure, please visit my web page, here; http://www.ronforhomes.com/shortsalelisting.htm. This page
has a great deal of information on the process, and the
advantages for you over a foreclosure. Some of these
advantages include:
Typically
less damaging to your credit than a foreclosure
You
may be able get out of the mortgage debt, completely
You
may be eligible under Fannie Mae guidelines, to buy
another home in 2 years instead of 5 to 7 years for a
foreclosure
You
can stay in your home during the short sale process
Because
of the complexities of listing a short sale, please be sure
that you select an agent to sell your home who is experienced
with these types of transactions. Please
call me for more information on how you can benefit from a
short sale!
Buying a short
sale property can be complicated. You need a buyer's agent who
has experience in buying and selling these properties I
will be happy to help your find your home and guide you
through the steps you will need to close it successfully! If
you are interested in doing a short sale of your home, I will
be glad to discuss with you!
