 Congratulations John & Mary! |
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I recently put John, Mary, and their newborn son William into their first home. As many of you know, home prices and interest rates are at their lowest level in 10 years. While we say it quite often in real estate... right now is truly the best time to buy a home. I'm not going to lie, in that it's very difficult to get financing through the banks, but I have a team of people who are excellent at getting our buyers a financing program even with today's tough lending requirements. With the economy starting to recover, home prices will begin to move slowly upward, so if you're interested in buying now, or are simply weighing your options, give us a call. We'll sit down and look things over to see if Home Ownership is the right decision for you and your family! |
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| What is an "REO" aka. Foreclosure? |
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REO is a abbreviation for Real Estate Owned properties.
If no one purchases the property at the Trustee Sale, then the home becomes an REO property, owned by the bank. The main reason homes don't sell in a Trustee Sale is because it doesn't work out to be a good investment for a potential real estate investor.
A home that has been "foreclosed" and has become a bank owned property can then be listed by a Realtor who is hired by the bank to market and sell the property. To sell the house as quickly as possible the lender will remove any liens on title, and clear any other issues that may slow down the sale of the property. Generally, lenders are very motivated to sell these properties, as they are in the business of lending money, not owning real estate. REO's tie up their capital reserves and hamper their ability to lend money. Also, the management of these properties can become very costly. This is the best opportunity to find a good deal.
Note: there are many homes out there for sale that are not distressed properties. The owners have a lot of equity, are motivated to sell and have priced their homes to move quickly. Distressed properties are not always the best way to find a great deal. |
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| What is a "Short Sale"? |
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A short sale occurs when a lender agrees to take less than the full loan payoff for an owner's property. In most cases, the owner is in default and is not making their payments for whatever reason. Short sales, in most circumstances, are the first step to avoid foreclosure. Short sales are very complicated and the outcome is not guaranteed. The bank (lender) is not obligated to take a short sale and in most cases the process to get one approved is cumbersome and frustrating for the Buyer, Seller and the Realtors. Each bank evaluates each individual request on a case by case basis. Many times there is more than one lender involved. Not only do the banks consider the borrower's personal and financial situation, but they also consider an appraisal of the property, market conditions, the banks financial situation, their current portfolio and in many cases have to consult with an outside investor who purchased the loan at some point. If a short sale is approved, it can be below market (depending on the bank appraisal), but by the time it's approved the market may have further declined and it may not be a great deal after all. If you are considering selling your home as a short sale, please consult with a CPA and an Attorney first! Depending on the types of loan(s) you have and your financial situation, it may or may not be the best option for you. |
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James Dwiggins
Chief Strategy Officer
2316 Orchard Parkway, Suite 200
Tracy, CA 95377
800-460-2288 Ext. 275 (Office)
800-310-6820 (Fax)
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