Housing Resource
Category: Foreclosed Homes & Short Sales

Is the JBLM Real Estate Market Changing for the Better?

In our last newsletter I discussed the current bank owned property inventory, and aggressive pricing by the banks.  The aggressive pricing seems to have had the

Home Buyer Market Info

desired effect.   A large part of the foreclosure inventory that piled up in November and December is sold, and default (pre-foreclosure) numbers in the JBLM Region have declined, especially in Thurston County (Info from Realty Trac) .  If you have been actively watching foreclosure listings, you have probably noticed that many (attractive and/or well priced) homes are no longer showing up in your search.  Of course the overpriced/junk is still out there!

There will of course be many, many more foreclosures over the next couple of years, but at least the tide seems to have turned.

I have been making noises about housing shortages for the past 6 months or so, and the inventory is starting to show signs of shortage primarily in finished new construction.  Several years ago, banks were allowing builders to pile up inventory…no longer.  Most of our local builders (Quadrant and Horton don’t fit this category) are now finishing one home, pouring the foundation on the next, and then being forced to stop until home #1 sells.  Additionally, while we still have a fairly large inventory of existing homes, much of what is out there has been picked over, and buyers are becoming more aggressive in bids on the more desirable properties.

Delays in new construction will push buyers to existing homes, especially relocating military buyers who’s alternative is a hotel.  More demand for existing homes, and a picked over inventory, may result in increasing home prices as we move into the summer.   With thousands of new arrivals expected to report to Ft. Lewis this year, our primary demographic (Close to JBLM, 1500-2000 sf, 3/4 bed 2/3 bath) is bound to be in more demand this year than last, when over half the population of the base was deployed.

While this is still very much a buyers market, things are looking up for potential sellers.  As we get further into spring and summer, I believe that we will see a sellers market situation for those wishing to sell, but only for those with desirable/well priced properties.

 

Owning a new or foreclosed home

In our last newsletter I discussed the current bank owned property inventory, and aggressive pricing by the banks.  The aggressive pricing seems to have had the desired effect.   A large part of the foreclosure inventory that piled up in November and December is sold, and default (pre-foreclosure) numbers in the JBLM Region have declined, especially in Thurston County (Info from Realty Trac) .  If you have been actively watching foreclosure listings, you have probably noticed that many (attractive and/or well priced) homes are no longer showing up in your search.  Of course the overpriced/junk is still out there!

There will of course be many, many more foreclosures over the next couple of years, but at least the tide seems to have turned.

I have been making noises about housing shortages for the past 6 months or so, and the inventory is starting to show signs of shortage primarily in finished new construction.  Several years ago, banks were allowing builders to pile up inventory…no longer.  Most of our local builders (Quadrant and Horton don’t fit this category) are now finishing one home, pouring the foundation on the next, and then being forced to stop until home #1 sells.  Additionally, while we still have a fairly large inventory of existing homes, much of what is out there has been picked over, and buyers are becoming more aggressive in bids on the more desirable properties.

Delays in new construction will push buyers to existing homes, especially relocating military buyers who’s alternative is a hotel.  More demand for existing homes, and a picked over inventory, may result in increasing home prices as we move into the summer.   With thousands of new arrivals expected to report to Ft. Lewis this year, our primary demographic (Close to JBLM, 1500-2000 sf, 3/4 bed 2/3 bath) is bound to be in more demand this year than last, when over half the population of the base was deployed.

While this is still very much a buyers market, things are looking up for potential sellers.  As we get further into spring and summer, I believe that we will see a sellers market situation for those wishing to sell, but only for those with desirable/well priced properties.

 

Foreclosed Home In Olympia Wa

If you are considering purchasing a foreclosed home, it is a good idea to have some knowledge of what to expect.  The foreclosure buying process is very similar to a traditional home purchase…with a few twists.

 

 Keep in mind that you are dealing with a banking institution, or a trustee working for the banking institution.  These people have very specific rule books that they follow, and the rule books don’t necessarily make sense, at least on the surface…. 

  • Expect delays…if the rule book gives the banker two business days, most will take two business days.  If they take longer…well, they make the rules.
  • Don’t expect compassion…the bank is only looking at the bottom line.  They don’t care if your appraiser has a problem with the roof, if your offer is all cash, or even if you send them pictures of how ugly the house is.
  • The rules normally require that the home be marketed to the general public, as is, and that the highest and best offer for the bank be accepted.  The banker probably cannot re-negotiate the price after your inspection…even if it makes sense.  HUD, for example, just puts the property back on the market rather than negotiating anything.    

Pricing Foreclosures…the term foreclosure brings to mind infomercials about buying homes for pennies on the dollar.  There is a reason that the infomercial people are selling books, rather than out shopping for real estate.  Rule #1, if it sounds to good to be true, it probably is (or it’s a short sale).     

Too good to be true?  …when shopping for homes with an average price of 225K, you find a similar home priced at 175K…don’t think it’s an accident, there is a reason which may not be apparent in the photos.     

Foreclosures are priced aggressively in order to get them sold quickly, but the bank’s don’t give them away.  If they did, the shareholders might get upset.   My experience is that foreclosures are typically priced 2-5% below retail, and that all are negotiable to a point.   

When making an offer, again remember that you are not dealing with an emotional seller.  If your offer is complicated, if you need more time to close, if the home needs repairs…the asset manager doesn’t care.   A fast closing may put your offer in a stronger position…but cash versus a loan doesn’t carry much weight.   

Inspections…Get an inspection!  The bank may not be willing to make repairs (“as is” usually means “as is”), but the inspection does give you piece of mind, and lets you know what you are working with. 

Closing:  Come closing time, keep in mind that once again, you are dealing with a banker or bank representative.  You may be willing to jump thru hoops to get signed/closed, but the seller may not be.  Be prepared to be flexible both in timing, and in other aspects of the closing.   For example there may not be a full set of keys for the home, it may not be cleaned prior to closing, and any debris that was in the home when you looked at it will probably still be there at closing. 

A large percentage of homes sold recently in Pierce and Thurston Counties are foreclosures…as many as 40%.  They can be, and often are, great deals…but you as a buyer should prepare yourself the unexpected, and take the surprises in stride…you are getting a good deal after-all, or else you wouldn’t be buying a foreclosure.

 

Investing in real estate as an owner occupant, a great opportunity for novice investors to enjoy the best of both worlds

Article By Phil Sharp Printed in the Olympian Newspaper

Investing in real estate has always been considered the key to wealth in this country, and investing in real estate in Thurston County has made many investors very wealthy over the past few years.  The local market has grown astronomically, when put into perspective with other markets around the country, and the local market is still booming.

The question asked by those who see this growth ( and haven’t seen it in the stock market lately) is “how do I get started”.  A great way to do

Invest in Real Estate as a Home Owner

Investing in Real Estate as Owner/Occupant

so is as an owner occupant of Multi-family housing.  Duplexes, tri and four plexes may be considered by lenders to be “owner occupied” if the owner lives in one the units.  The benefits to the owner are numerous, and allow buyers to get into the fabled “zero down or close to zero down” deal.  Other benefits include tax advantages of owning your own home, no capitol gain tax if you own and reside in the home for two years, and potentially having your tenants pay all or a part of your living expense.

Typically, real estate investors pay 10 percent or more in down payments for investment properties.  This number can go beyond 20 percent depending upon the type of property, its use etc.  As an owner occupant, 95, 97, and even 100 percent of the loan to value (LTV) is common.  What this means is that if the four-plex you would like to buy and live in is financed at 97% LTV, and we assume that your four-plex is valued at $200,000, your cost to purchase would be $6000 (3% of $200,000), and your lender would finance the remainder of the cost of the property.  You could expect to pay an additional 3% in closing costs making your total purchase cost $12,000.  Twelve thousand dollars is a lot of money?  The bette3r your credit is will determine how much you can borrow, and at what interest rate.  I mentioned earlier that 100% owner occupied loans are available, some will even roll closing costs into the loan, making your deal truly ZERO down!

IT GETS BETTER:

  • If you own your own home, whether it is single or multi family, you can deduct from your taxes all of your interest payments and depreciate the value of the dwelling over the course of its useful life.  Using the $200,000 example, the approximate annual mortgage interest expense would be $12,000, and depreciation would be about $6600, an $18,600 tax deduction.
  • Investors pay capitol gains taxes when they sell property, and can’t avoid it.  If the property is owned for less than one year, income tax is paid, which is significantly higher than capitol gain.  As an owner occupant, residing in the property for a minimum of two years, the IRS has a provision that allows you to pay no tax on the gain in your property.   Going back to the $200,000 property:  Property is purchased for $200,000 (all expenses in closing the purchase are deductible), assume that the property is held for five years, and that it appreciates at 10% per year (that may seem like a large percentage, however, many investors have experienced 12-14% gains in our area over the past 5 years), so the property is sold for $300,000.  As an investor, the tax liability is 15% of 100,000, or $15,000.   As an owner occupied residence, the tax liability is zero.
  • Who pays the rent?  This is where it gets really good.  Going back to the $200,000 example, the monthly payment; principle, interest, taxes, insurance (PITI), on a property of this value would be approximately $1600 (based on a 6% interest rate and estimated cost of insurance and property taxes).  Assuming that each unit rents for $600 per month, rental income from three units would pay the mortgage payment, and put $200 per month back into your pocket.  All of a sudden, you, the home owner is living in a building with no payment, and are actually making money every month for the effort.

So, all of this is great.  Does anybody else know about it?  Absolutely!!  In order to pursue and acquire a property that will work for you, you must prepare yourself to act.  Action is what intimidates investors who dream, and invigorates those that succeed.   First, meet with a lender, get pre-approved and determine what your ability is as a buyer.  Second, establish a relationship with a real estate agent that will comb the market for your potential home (A good agent should also be in tune with lenders, and may be your best source in locating a local mortgage lender).   Finally, be patient, and be prepared to act.  The real estate market in our town is on fire.  Homes available are not keeping up with demand, and inventory is low.  You and your agent will need to pursue every opportunity, and be prepared to make an offer on a moments notice…good deals go quick.

Investing in real estate can be fun, and profitable.  The added benefit of living in your investment is obvious, and can start helping you build the leverage needed to continue investing in additional properties.  As you get into your first investment, you will start to learn the creativity and skills that have made many investors rich; remember, however, none of that creativity and skill is magic, just knowledge and insight that is easily gained by talking to the right people, your real estate agent and lender are the first and primary sources for the information you need to succeed.  GOOD LUCK!!

Phil Sharp is a Realtor/Broker in Olympia, his investment company, Sharp and Sharp Holdings LLC, has invested successfully in Real Estate in the Olympia area  six years.  He can be reached at 360-970-9977, or via email at Phil@PhilSharpHomes.com. (Contact information updated from original article)

 

Q: There is a home I am interested in, but the home is being sold “as is” and from the pictures it doesn’t seem to have the interior finished. Is it a good idea to buy an unfinished home from a builder that is being foreclosed on?

A: I would not recommend finishing out for a builder. There are plenty of finished homes that are distressed, and finishes are the most expensive part of building….typically, you can buy it for less than your total cost would be if you finish it. Also, if you finish it yourself you will void any warranty. Builders, even if they go under, are still required to warranty what they built under Washington law. In a situation where the builder is in trouble they have a bond to cover the warranty. In a nutshell, unless your work will return $2 for every dollar spent, you are probably going to be better off buying something that is finished and has a certificate of occupancy. You would not even be able to live in an unfinished new home, until it is finished and then inspected by the city. Also, a lender is not going to lend on an incomplete home, you won’t be able to get insurance unless you are a contractor etc. etc.

 

Foreclosure freeze Screw DriverThe likelihood that the latest housing crisis will grow into a freeze or moratorium on foreclosures is increasing as foreclosure moratorium discussion gains more media attention.  Some of what is being reported in the media indicates that legal recourse (foreclosure rights) may have been lost by lenders because of short cuts taken during the process of buying, selling and recording mortgage related security instruments. 

Before going further, I want to remind readers not to take all that you will inevitably hear about the “foreclosure moratorium” as fact.  The mis-information already floating around will inevitably be taken by some as gospel, and it will cost them their homes.  I recommend taking everything you hear about the foreclosure moratorium with a grain of salt, and don’t make any life altering decisions based on sketchy reports of banks being unable to foreclose.  IOW, if you aren’t making your payments, you will probably loose your home. (*but you may be able to make use of a delay in foreclosures to try again for a short sale or mortgage modification).

After the disclaimer in the previous paragraph, I encourage you to read an incredibly scary article at  http://market-ticker.org/akcs-www?singlepost=2207990, The link came from Maria Morton, Kansas City Real Estate (Prudential Kansas City Realty).   Prior to reading this, I was under the impression that the most significant foreclosure problems were technical/administrative mistakes.  As you read, I think you will agree that there are some pretty significant “Oh S#@ts” here!

In my post about the latest foreclosure crisis, the issues that I presented were primarily robo-signing, loss of original documents, and other administrative failings on the part of the mortgage and trustee industry.  The issues brought out by Mr. Deninger, if they are factual, are much more significant.  These issues are so significant that they may well result in some mortgagors being able to walk on their lenders….without loosing their homes.  According to Mr. Deninger’s article, as lenders sought cheaper and more effective ways to bundle and sell portfolios of mortgages, they started taking short cuts in document recording, short cuts that affected chain of title and securitization of mortgage notes.  In other words, they may have inadvertently signed away the security for the notes they are holding…and of course that security is the borrower’s home.  In addition to stupidity, I am sure there were also crimes committed.

This situation will inevitably make lots of money for lots of lawyers, will cost tax payers piles more, and will probably allow distressed home owners to stay in their homes a little longer.  To home owners in distress…you rarely get something for nothing, so don’t plan on it (but if you can, look at this a short term reprieve and take advantage of it).  To the rest of us…brace for more finger pointing nonsense, brought about by greed, which will impact your life, and the value of your home, for a little while longer.

 

Will a Foreclosure Moratorium Result in Temporary Help for Distressed Home Owners?Foreclosure Moratorium or Freeze

The Attorney General of the State of Washington, and those of numerous other states, took action today regarding the current crisis in real estate foreclosures.  Rob McKenna, the Washington AG, put all foreclosure trustee service companies on notice, telling them to ensure that they are following the law in each and every foreclosure case, or not pursue the foreclosure further until they can.  While this does not amount to a governmentally imposed foreclosure moratorium, it may have the effect in a limited way.

Several large mortgage lenders have recently decided to voluntarily impose a moratorium on foreclosures until discrepancies in the way they are processed are resolved.  Reports on problems found with recent foreclosure proceedings show that most problems are a result of the sheer volume of foreclosure activity.  Bank employees signing documents by the thousands without reading them, notarizing signatures that were not witnessed, and short cuts in the legal process seem to be the most common sort of issue.  The current situation will require that all foreclosure files frozen in the process be carefully reviewed.  Missing document issues will need to be resolved, T’s will have to be crossed, and I’s dotted….but don’t fool your self into thinking the foreclosure will stop.

If a foreclosure moratorium is imposed, Home owners in distress can (and should) look at this as an opportunity.  While the likelihood of someone keeping their home and not making payments is pretty slim, a freeze could possibly add several months or more to the time you have.  If you have not tried a short sale, take this as a sign that you should try.  If you have not tried to get a mortgage modification (or if you have and failed) try again.  If your mortgage lender is one who has imposed a moratorium on foreclosures (such as BofA), they may become more interested in a mortgage modification instead of a foreclosure, especially since they are not doing foreclosures right now.

Are you are a home owner in trouble, don’t bet that a foreclosure moratorium to bail you out…but it will gain you some time.  Take what you can get, and take advantage of the situation!  If you are a homeowner not in distress, this probably means that the ups and downs of the real estate market may continue for a while.  If you are a home buyer, all of this means that there probably isn’t going to be a better time to buy a home….ever again in your lifetime, and the deadline on the fire sale just got extended by of all things…a freeze on foreclosures.  For More information about the foreclosure freeze, or foreclosure Moratorium, visit the Phil Sharp Homes Foreclosure Page

 

    If you’re in the market to purchase a home, you have probably come across a HUD owned home that looked interesting and wondered, what does it take to purchase a home like this? Is it worth the headache?
I purchased my first home a few months ago that was owned by HUD and I’m going to tell you right off the bat, it was a nightmare of problems!  Not with the house, but with the transaction process.  But if you ask me today, was it worth it?  My answer to you would be, Hell Yes!  I got into the neighborhood that I have always wanted to live in for an unheard of price for the location and I have a ton of instant equity.  Plus, I got in at the end of the First Time Home Buyer Tax credit and got an extra $8,000 just buying.
If you are not familiar with what a HUD owned home is I’ll give you a brief description.  HUD stands for Housing & Urban developement.  When a homeowner loses his home and has an FHA mortgage, the home goes back to HUD to sell.  HUD homes are listed as any other home on the market, your real estate agent, (which should be a registered HUD agent in able for you to make a bid) is able to show you the home, inside and out.  When a HUD home is first listed, it has a 10 day grace period for owner-occupants.  This means that in order for you to purchase the home in the first ten days, you need to occupy the home and cannot be an investor.
Making a bid is the difficult part.  You have no idea what other people are going to bid… should you offer more than the asking price? Less the asking price? Or offer to pay the full asking price?  In the end, it all depends on the net to HUD.  If you offered $199,000 for a home and the net price is $189,000 but the next guy offers $195,000 and his net to HUD is $190,000, they get it. There are no second chances. You need to ask yourself, “What is the most that I am willing to spend on this home and be able to live with my decision?”  It’s possible that you can offer more than the asking price and no one else puts any offers on it.  After your offer is submitted, it’s waiting time.  At the end of those 10 days, the winner is notified and you can also look at it on the HUD website.  Eventually you will be able to see all the offers on the property… but would you want to look or just be happy you are the proud new owners of the home?
After your bid is accepted, you are able to hire professionals to inspect the home to your own satisfaction.  If you find something you don’t like, you’re not stuck in the contract, you can revoke your offer.  The only thing that is different with purchasing this home compared to the home down the street is that the seller will not pay for any repairs to the property.  These homes are AS-IS.  Any repairs come out of your pocket!  In the home that I purchased, it was only cosmetic work; painting, cleaning, appliances, yard work, replace fixtures that were taken etc.  But is it worth it? Yes!  Trust me, all my neighbors are jealous!
Our main issues with the purchase of our home were just trying to get the darn thing to close.  HUD has a mandatory 45 days for closing. They will take 45 days and then some!  Our lender was ready to close 30 days into it; escrow said they needed the full 45 days.  On day 46, we were doing an extension, which only comes in 15 day increments.  Escrow took those extra 15 days and were still not ready to close!  Needless to say, at this point we were frustrated.  It’s hard enough planning a move but when you don’t even know the exact date, there’s nothing you can do.  Luckily we were renting from a family member or else we would have had no where to go.  You can’t give 30 days notice to your landlord and then say, “Oh, I need 15 more days, I think”.  We had to reschedule the moving truck and carpet cleaners 3 times and the appliances 4 times. Escrow claimed they needed home owners association (HOA) info for the house and could not get a hold of them.  I personally had to contact the HOA and I was able to get the info to HUD that same day. Grrrr…. By then we were on our second extension and 62 days into this.  Our lender had to re-draw docs 3 times before this deal closed. It wasn’t until our realtor wrote a letter to the top guy at HUD that we actually saw movement and closed 68 days after the contract was accepted.
On signing day we were so excited to finally get closing behind us and into our new house.  We brought a closing check to the courtesy signer and gave it to him to mail with our closing documents.  The next day when escrow received the check they called us and said that they don’t accept cashiers checks, we needed to wire the money.  Their own courtesy signer didn’t know this!  So this call came in Thursday afternoon and we were set to close that Friday.  This check was about 2 hours away and we didn’t have another chunk of money to wire them!  Our money was in that check!  Luckily they were able to FedEx it back to us over night, we tracked the FedEx delivery guy down and got it to the bank in time to close that day but not after fighting with the bank over the check because escrow stamped the check with VOID.  Hello, cahiers checks are money! You can’t just stamp VOID on it.  Our bank didn’t want to release the money because they thought it was already cashed.
Even after all of this hassle, I would do it over again to be in this house.  I love living here, I got a screaming deal and we are the proud new owners of a home that needed someone to love it! I would recommend buying a HUD home to anyone.  Hopefully your transaction will go a little smoother then mine or this may just give you a heads up on what to expect, as I had no idea…

 

Short Sale HomeIn today’s economy, the people that are able to purchase a home, are only interested in one thing…. Finding the most bang for their buck!  Everyone wants to be in the biggest, bestest house but only wants to pay the price of a single wide trailer.  Yes, the market has changed and home prices are way below what they were 5 years ago.  But that does not mean that you can find a home that is a 4 bed, 2.5 bath, 2200 square feet for under $150k. Most people don’t get it.  You get what you pay for.  If you are so lucky to find everything mentioned above, do you really think it is going to be move in ready?  Be prepared to do extensive work to get that home in livable condition.  Also, keep in mind that most lenders today will not even lend money on a home that is not move in ready so make sure you have cash on hand to purchase this dream home.

All kidding aside, this does not mean that you cannot find a really good deal.  You just need to be reasonable with what you are asking for.  If you have time to wait, short sales are a good option if you are trying to save money.  Patience is of the essence when trying to purchase one of these homes.  A short sale is listed at a price that the bank has not agreed too so if you are saying to yourself, “WOW! That home is only X amount of money?”  Chances are the bank is not going to except that low of a price.  Your realtor, and yes, you should be using a realtor, can figure out what the sellers paid for the home. This will give you a better idea of what kind of a loss the bank is willing to take. Keep in mind, that even thou the seller’s have signed off on your offer, it is ultimately up to the bank to approve the sale and even thou you have submitted an offer to the bank that seller is still taking offers on the home incase you back out. If the seller has multiple lenders, this transaction just got way more difficult.   Let’s say, the first lender has agreed to the offer, now they have to negotiate with the second lender to see what they are willing to take.  In some cases, the first is not willing to give up some of their money to give to the second and no one can come to an agreement.

   Some things you should know about before committing to a short sale…

After the sellers have signed off on your offer, it gets submitted to the bank where it can sit on someone’s desk for up to six months.  There is nothing you or the seller can do to push your contract through.  When they get to it is when they get to it.  In the meantime while you are waiting on an answer you can be missing out on the next good deal that comes along. Or the home you have “under contract” so to speak could go to auction and your contract means nothing.  Once a home goes to auction it is out of the current owners hands.  It either gets purchased at the auction or it goes back to the bank and you have to wait to purchase it when it gets re-listed with the bank.  If you offered on a home that is at the top of your price range, you need to be prepared for the bank to come back with a counter.  Since most short sales are priced artificially low, the bank most always comes back at a higher asking price.  You need to decide on what to do if this happens.  If the bank gives an answer on what they will accept, and you back out, the seller is able to put his house back on the market as “pre-approved short sale” and for the next 30 days, the next buyer will have a smooth closing, all because you backed out.

Even with all of these “potential” hurdles, some short sales go rather quickly and you end up with a really good deal.  Like I said in the beginning, you should not be on a time line to purchase a home if you are considering buying a short sale.  A suggestion to you… If you do put an offer on a short sale, keep your eyes open for new listings that come on the market.  Don’t stop your home search. You may find another home that is just as good with not all the headache and waiting.

 

What is a Foreclosure?

In today’s Real Estate market foreclosures are becoming more and more common. A foreclosure is a house where the owners, for whatever reason, discontinued making their monthly mortgage payment. Over time the bank will take the house back forcing the occupants to move out. The bank will then try to sell the house to the public, usually at a small discount, just to get it off their books.

When starting your house hunt for a foreclosure you need to be aware that many of these homes are distressed properties that need a ton of work. The previous owners often strip down and/or damage the inside of the house in anger leaving the home uninhabitable. Foreclosed homes are often vacant for a long period of time so they can have unpleasant odors and be very dirty. You need to keep an open mind and look at the possibilities while viewing bank owned homes. Also be aware that most foreclosures are sold “As Is” meaning that the bank will make no repairs to the home prior to selling it. If you are looking to purchase a foreclosure make sure you set aside plenty of money for cleaning and repairs of the property.

The purchase of a foreclosure is really no different than that of any other home other than you are purchasing it from a bank rather than a person. One thing to keep in mind when submitting an offer on a foreclosure is that other people may also be making offers on it especially if it’s a really good deal. Many foreclosures end up selling for more than the listing price.

What is a short sale?

Short sale is another very common term used in today’s Real Estate market. A short sale is a home that is in jeopardy of being foreclosed on. The owners are most likely going to lose their house to foreclosure if they do not sell it so they will ask the bank to take less than they owe on it. The main thing to remember is that the bank needs to approve the sale price. This can often take months. It is very common that the house goes into foreclosure before the bank makes a decision about an offer. In this case all bets are off and the house is pulled off the market. If you have a lot of patience and time there are some good deals to be had in short sales but they are very hard to get.

While house hunting you need to remember that unlike foreclosures short sales are not usually distressed properties since the owners are very desperate to sell. These homes are going to be more appealing to people since they are in better shape and are underpriced. For these reasons short sales usually result in multiple offers. With a good deal comes a lot of competition. To avoid disappointment just remember there are no guarantees with short sales.

There is such a thing as a pre approved short sale in which the bank has already approved the sale price and you can purchase it like you would any other home. If a home is a pre approved short sale it will be noted in the listing. These are not very common and there really isn’t much of a chance at getting the house at less than the asking price.

Before purchasing a foreclosure or short sale make sure you do a lot of research and hire a realtor who is very experienced. You will want to look at the comps and make sure you are getting a good deal. Lastly, make sure you have the house inspected so there are no surprises.