Understanding the Process of Buying a Foreclosure or Short Sale?

If you're looking for real estate, what you're hearing is true: It is a buyer's market. But it's not always easy. In the circumstance of the short sale or foreclosure section, conventional guidelines don't apply. The bank is the authority, and its agents will take their time choosing the best technique to get this piece of real estate off their books. Its employees are trying to maximize their profit or recovery, depending on the situation, in a tricky market.

There are some criteria in how quickly you will get a response when purchasing a short sale or foreclosure. If the property is a short sale, the bank does not own the home. Its agents are determining a price at which they would say yes to transfer the title from the current owner, who is most likely behind on their payments, to a new individual who can pay. Short sales will generally take longer because the bank will receive purchase offers for certain period of time.

If it is a foreclosure, the bank owns the home, and at this point they are trying to get as much for the property as they can. These decisions are usually made more quickly; the bank is does not want to manage the real estate as an asset for an lengthy period, so they will speed up the process.

An additional item which affects the offer is whether you are buying the real estate at auction or from a real estate brokerage. At an auction, you will be required to come up with certified funds in one day. You will then have to wait for a period of time called the "redemption period" that allows the homeowner time to attempt to offer funds to re-own the property. On the opposite side, if you're purchasing the property through a broker, you will probably need to wait from a three to five days to a few months.

Most of us are not cash buyers, and one thing we can do to quicken the process is to make a an offer close to full asking price. The bank owned homes are priced to go quickly. Data shows it is common for the property to sell within 2 to 3 percent of list price. As a homebuyer, if you are sure you want the bank owned home, make a reasonable offer based on market value

Homeowners interested in short selling their home buying foreclosures, or by going to a website that has bank reo home lists with lender contact information