Nearly 1 million homes were foreclosed in 2009 and many of these homes now appear as foreclosure listings in the multiple listing service. Everyone has heard about short sale listings and how difficult it is to get the banks to respond offers to purchase the homes. There's a very good reason that banks aren't motivated to sell short sale listings. First a short sale by definition means that the bank is being asked to sell the home for less than the mortgage on it. Often, MUCH less. Secondly, the home is still occupied with an often hopeful owner who is maintaining the home and perhaps even paying association fees and taxes. When the bank forecloses, these expenses become the bank's obligation. Lastly, the number of delinquent mortgages are overwhelming to the bank and they simply don't have the staff to adequately review short sale offers.
Florida is a judicial foreclosure state which means that banks have to take the owner to court and win a summary judgement before they can foreclose on the home so one would think that they want to save the hassle and expense of court but this doesn't appear to be the case. Innovations of the banking industry after deregulation has created numerous defenses to home foreclosure which will be covered in a subsequent article but many homeowners feel helpless when faced with foreclosure and allow the bank to win their property through default - the owner doesn't show up in court. Still other delinquent homeowners arrange to turn their deed over to the bank rather than go to court. This is known as offering a "deed in lieu of foreclosure". So the banks have now got more properties than they want without even agressively suing foreclosure complaints in the courts and they need to sell them.
Real estate investors now have a cornucopia of bank owned properties to choose from which have now begun to populate multiple listing services. Tradionally, bank owned properties were rare jewels offered to tried and true investors who had established relationships with the bank but this is no longer the case. Anyone can purchase a bank owned property or REO (real estate owned) for any purpose. In fact, many banks are offering financing on their REO's. So real estate shoppers can take advantage of the large number of bank owned properties instead of waiting months for their offers on short sales, only to be turned down.
People may mistakenly believe that bank owned properties are destroyed or otherwise undesirable. In the Florida Panhandle real estate market, multi million dollar homes, waterfront condos, beachfront lots, prime commercial spaces and even bulk units for investment are being offered at prices well below today's market value . Just like any other seller, the asking prices for these foreclosure properties are negotiable. So if you are looking for real estate, don't pass the growing number of bank owned properties on the market today.
by: Deborah Orr, Broker / Exclusive Buyer's Agent
In a time when sellers are in trouble and prices are soft, it's critical that buyers have their own representation working for them to get the lowest possible price on their real estate purchase. There is an inherent conflict in representing both the buyer and the seller in a real estate deal. Would you go to court and use the same lawyer as your opponent? Then why would you in a real estate purchase?
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