Foreclosures, Short Sales, Bank or Corporate Owned Homes

What are these?

There are a few reasons why the real estate market is down from 2007. But I am not going to go through those reasons but otherwise look at what we are dealing with at the present time. The common theme and phrases we see and hear in real estate since 2007 comes from these dreaded words: foreclosures, short sales, and bank or corporate owned homes. Here's a quick explanation for each of these terms:

Foreclosures or Pre-foreclosures: Home owners who have continually failed to pay their mortgage on time or avoid payments for months causes the banks to foreclose on the home. Before foreclosure proceedings start, the banks are required to send a notice by mail to the mortgagors or owners which they will be given a time (usually 30 days) to correct the problem. After the time has passed and the bank has not heard from the owners, the proceedings starts and foreclosure is filed by the bank to the courts. Homes like these usually have liens ties to it such as unpaid equities, HOA's, taxes, and/or improvements. Be ready to pay for this items in addition to the selling price. If you are going through a foreclosure, I strongly advise that you consult a real estate lawyer.

Short Sales: A way to avoid foreclosure is through a short sale. A short sale is an agreement between the owners and the bank or mortgagee to sell the home at a price lower that what is owed. The bank takes a considerable loss from this transaction. The owners will still be responsible in selling the property and the contract and selling price contingent upon the approval of the bank. If you are experiencing difficulties with the monthly payments of your mortgage and believe you can no longer keep the property but would like to avoid foreclosure and save you credit standings, call your bank and talk to their representative to arrange a short sale. Contact a real estate agent to help you sell your home as a short sale.

Bank Owned or Corporate Owned Properties: This type of properties have already completed the foreclosure process and is now owned by the bank or corporation. The properties are usually being sold as-is with right-to-inspect and are free from other liens.  

Tip of the Month

Who could have ever seen this market the way it is right now after seeing the opposite of it just a few years back. With many foreclosure homes available and still rising, short sale homes, and bank-owned homes competing are pretty much taking the wind out of individual seller's. To compete in this type of market a seller will need to be smart and do what needs to be done. Besides the practical ways of staging and updating your home inside and out, one thing that sellers fail or refuse to do is bring the price of the home down to what is right. Pricing is the number one cause of homes selling quick or drying-out. I can help you price your home right through a Comparative Market Analysis (CMA) which is a study of comparable homes sold within the past year. Call or send me an email to start.

• If you have decided to trade up, look at your budget and make a realistic determination of how much more you can spend. Include any extra costs a larger home might require such as upkeep, utilities or new furniture. Go through the pre-qualifying process for more accurate information on the kind of mortgage you will need.
  Trading down has it's own set of considerations. Reliable professional tax and financial assistance will help you to not end up paying more than necessary in this area. Your real estate agent is someone who is neutral and may be able to offer you the best advice.
• Take care of the small repairs you may have overlooked such as a sticking door or broken windowpane. Fresh paint inside and out will go a long way in adding to your home's appeal, as will a newly trimmed lawn, a few seasonal flowers and the elimination of all clutter. And most important of all, clean, scrub and polish till your home sparkles!
• Home Staging is something you may want to consider to present your home in its best light. Builders have been doing this with their model homes for years and it provides the finishing touches that will give your house emotional appeal. This will consist of such things as creating fragrant aromas in the kitchen, making sure fresh towels and soap are in the bath, placing fresh flowers in a vase, rearranging furniture to create a welcome feeling and brightening up rooms with proper lighting.
• If your kitchen or bath need updating, it may be better financially to offer an incentive to a prospective purchaser rather than tackle the expense and trouble of doing the work ahead of a sale. Save your resources for your new home and place your efforts into the cosmetic improvements that will create a cheery and comfortable appearance.
• Consider having a yard sale to clear your space of any possessions you do not plan to take with you or the things that have been hiding in the basement, attic or garage. Or, call your favorite charity and get a tax credit for the donation.
• Take time to think about the emotional detachment that will be necessary. After all, this house has provided you shelter and comfort and there are a lot of memories tied up there. You must now look at your home as simply a piece of property - an investment that has served you well.
  

More answers can be found in our FAQ's page.