Profile picture for chenworthandsons

buy short sale or wait for foreclosure?

After reading posts, it seems that the turnaround on a foreclosure is much quicker than a short sale. I have a short sale home I would like to put a bid on but should I ride it out and let it be foreclosed on to quicken the process. I could survive if I lost the house, but nothing is moving in Bel air, Md right now so i think I could wait.
  • January 23 2009 - Baltimore
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Answers (16)

If you have the tiime to wait 2-4 months to move, then by all means go for it! Make sure you have a Realtor that knows something about Short Sales so they can determine if the Listing Agent knows what they are doing. That will save you time and aggravation. Secondly, your Realtor should be able to help you understand the process and educate you so you can make a good decision. Foreclosures are also tricky but more predictable. You should have a Buyer's Agent representing you if you are in Maryland. Good luck!
  • March 30 2009
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It all depends on how much you want this house. 
Right now there is nothing to indicate that the house will ever foreclose.  Just because the owner is trying to do a short-sale doesn't mean he can't make payments on it.  It might just mean that the house is worth less than what he owes.  Obviously the most common reason someone would do a short sale is because they can't pay for it and in this case it would probably end up in foreclosure.  If it's because he's upside-down on his loan, the seller may decide to just keep paying.
  • March 26 2009
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Profile picture for Las Vegas agent
I constantly do short sales here in Las Vegas and I will tell you a few things you should know.
1 out of 5 shortsales close that is a national fact. Numbers have been getting better. Be armed with patience, the fastest short sale I've done took 2 weeks, the slowest 6 months.
Some loan servicing companies have no idea as to who owns the loan or how many owners and if it has an investor pool, that sometime is the equivalent of asking a room full of people what the ideal room temperature should be.
Also take into account the agent doing the short sale, not all have the same experience.
However if it does close you may get a pretty good deal.
  • March 26 2009
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A non-judicial foreclosure can occur expeditiously, a judicial foreclosure can sometimes take a year or more.

Unless the lienholder is successful securing the property as Real Estate Owned (REO), you may never even have an opportunity to purchase it, as it easily could be sold at auction.  

Lastly, the perspective that all homes sold via short sale, foreclosure, or real estate owned are always a fabulous bargain is purely a myth.  Banks often will make every effort to mitigate their losses.  The price is often reflective of location, physical condition, market conditions, and other elements.  Yes, there are some bargains, but few and far between.  Those venturing into such an endeavor need to a more than a rudimentary understanding of what they are doing, or have trustworthy professional assistance as the stakes are high!

  • March 25 2009
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Hello. I just bought a bank owned property which they were asking $59,000 for.  I offered $40,000 and stood my ground and they finally excepted. I also wanted to put in an offer at $120,000  on a 142,000 asking price property but my Realtor said a minimum of $133,000.  I didn't make an offer and comes out they took $128,000.  I was hoping to get it for 130,000.
Don't always listen to realtor, listen to your gut.  Remember, you can always walk away.


  • March 25 2009
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Profile picture for Ken Kopper

chenworthandsons, Does your buyer's agent think its unreasonable because its a "lowball" offer on the listed price? What sort of evidence does your realtor or the listing agent give you that property is fairly priced to begin with...I have seen short sales listed and then once they become REO's the bank drops their pants and gives it away @ 20% or more from what the short sale listing price was.

If your agent can give you concrete comparables (meaning other short sales and foreclosures in the the area) to show you that home is fairly priced and its sitll above what your willing to pay, I would say throw your hat in the ring with your best offer, dont hold your breath and keep shopping.

The only real obvious downside to waiting for property to become bank owned is that there is a good chance the condition of the property will drastically deterioate when the current occupants vacate.

  • March 25 2009
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Profile picture for chenworthandsons
He thinks it is unreasonble but worth a shot. I want some second opinions.
  • March 25 2009
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[self-promotional post, removed by moderator]

Hi Chenworthandsons, I did not know you were represented by an agent. You should ask your agent these questions. I can tell you this however, the Seller is still the owner of record regardless of whether they are advertising a "Short Sale".  They can still accept or reject your offer.
  • March 25 2009
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Profile picture for LyndieQ
Why is it we have read for so long that banks lose tons of $$ when they have to foreclose, but they make it too difficult to do a short sale?
  • March 24 2009
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Profile picture for chenworthandsons
the realtor on the property says they won't budge off of the $439k asking price because it is already  a short sale. What does that mean?? It has been on the market for 105 days with one offer that i assumed didn't get accepted. I don't have a contigency, but I don't know how low I can go. $380K is more my speed. It does need some work. When my realtor mentioned $400K the selling realtor got pissy and said no way. Isn't that the banks decision or do the current homeowners have a say?
Should I give it a shot?
  • March 23 2009
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I recently purchase a foreclosure as my primary residence in Fallston. What a GREAT deal! - I also have Bank Owned Properties in my inventory of homes for sale and can tell you....once you put in an offer, I typically receive a response in a day vs. a short sale 1 to 3 months. I am a fan of foreclosure offers however it cannot be a contingent offer...meaning you cannot have a house to sell. However...there is room there to negotiate. Maybe not on the price if it is new to the market but you can negotiate the closing costs. Give me a call if you need more information on how to put in an offer that will be acceptable on a foreclosed property...I have been there and everything worked well for us.

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  • March 23 2009
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I say try the short sale and if you don't get it for your "ideal" price then hope it gets foreclosed on.  I personally bought a forclosure last summer in Baltimore and I still think it was a great deal! 

  • March 09 2009
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Profile picture for John12377
What type of mortgage do they have?  If it is an FHA loan and you pass on the short sale once the foreclosure is done it will become a HUD owned property and then the bidding begins.  I would always try for the short sale first.  If you don't get it short then you can try when the bank gets it.  I had a seller who was going into foreclosure and I was going to try to buy his property via s/s.  He backed out of the agreement we had started and told me he had gotten things worked out with the bank.  Well I saw his property on the MLS the other day listed as a HUD property for $65,000.  Great deal right?  If I had been able to keep the deal together I could have gotten it for around $55,000.  Give it a shot.  What do you have to lose?
  • February 17 2009
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Chenworth,  

It is worth doing a short sale if you have the patience.  You can also put out multiple short offers and withdraw once one is accepted.  If comparing a short sale (4-12 weeks) vs. a REO (sale 3-6 weeks) I would lean toward the REO for faster answers and settlement.  

In response to the earlier poster, I don't think we will see another 20% decrease.  Maybe another few points this year.  It will take disastrous news or major interest rate increases to drop another 20 pts.

  • February 17 2009
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Profile picture for jal74
I want my commish !!!!

Rent for another 12 months.  Let it fall into foreclosure.  You will be able to pick up that house, or 12-15 just like it for 10-20% less than you would today.  The housing market sucks, and its only getting worse, not better

Kind Regards
  • February 02 2009
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Short Sales can take as little as 2-4 weeks or 2-4 months to complete. The lenght of time it takes to receive a response from the Lender depends on how many mortgages the seller has and with whom, agent's knowledge and dedication to work with the Lender and Seller's hardhsip. Unfortunately, 80% of my business over the past year has been working with short sales. I have found that in many cases the Buyer, if patient, has been able to get a better deal with the short sale vs. the bank listing it as a foreclosure. From personal experience, with regards to the banks I have dealt with, the quickest one to close was 45 days and the longest 90 days. Considering that the average traditional re-sale occurs in 30-60 days, it is not that much longer a wait, it just seems like it since you are in a "holding pattern" until the bank(s) respond. The downside is that you wait and the bank declines the offer. Personally, I have not had this occur, but it always a possibility.
  • February 02 2009
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