The last several years, we have seen questions about foreclosures and short sales on the rise.
So do you know the difference between a short sale and a bank foreclosure?
There is so much more to these sales, but check out this quick video for a tutorial – it might help you when making a decision on whether to buy a distressed property on Hilton Head Island.
Several years ago, we didn’t hear much of foreclosures and short sales on Hilton Head Island. Now it seems like a common word in our vocabulary.
So, do you know the difference between a short sale and a bank foreclosure? Sometimes people are confused by what might come from participating in a foreclosure or a short sale. Hopefully the following link can help clear up some of the questions you might have.
I recently had a foreclosure property listed for sale and we received 7 offers on the property. After the property closed I had a client ask me why the sales price was higher than the list price.
When putting an offer in on a foreclosure property, it is important to remember that the bank is usually most interested in an offer with as few contingencies as possible – usually “as-is” with no contingencies and a preapproval letter from a bank. This is especially important when you are competing with other offers as in this case.
My tip for someone who wants to make an offer with no contingencies but it worried about something being wrong with the property; get a home inspection prior to making an offer – if you are pleased with the results then your offer will look great and you will have some peace of mind.
IInterested in buying a foreclosure? Check out some of the best foreclosures and short sale properties available on the market.
I recently saw a study by RealtyTrac which looked at the number of foreclosures in the country; it stated that during the 2nd quarter of 2010 that 15% of all sales in our country were foreclosures. What really amazed me were the percentages by state; 43% of California’s sales were foreclosures, 32% of Michigan’s sales were foreclosures, 27% of Georgia’s sales were foreclosures, 24% of Illionois’ sales were foreclosures and 20% of Ohio’s sales were foreclosures.
I was quite surprised to see that Georgia had such a high percentage of foreclosures because I consider them to have a fairly stable economy. In Fulton County there are 15,000 foreclosures and 11,000 normal properties on the real estate market, in Cobb County there are 7,200 foreclosures and 6,100 normal properties on the market and in Gwinett County there are 10,000 foreclosures and 6,000 regular properties. If you look outside the Atlanta area the percentages become more reasonable.
I don’t know the numbers for South Carolina, but Iowa had the lowest percentage with 4.43% of sales that were bank foreclosures.
Unfortunately, these bank foreclosures will continue to have a negative effect on the real estate market – foreclosures tend to put pressure on prices.
We have to work through these foreclosures to get the market turned around.
In the meantime, if you are looking for a great deal on Hilton Head Island there are some excellent opportunities available in foreclosure, short sale and normal properties. Click here to see a list of foreclosure and short sale properties on Hilton Head Island.
I am often asked what is the difference between a short sale and a foreclosure.
In a short sale, the owner still owns the property, but if they tried to sell they would have to bring money to the table because the property is currently worth less than the mortgage value. This is money that the owner does not have so they are negotiating with the bank in order to get out of their home before going into foreclosure.
One of the major problems with short sales is the fact that they take a lot of time. This does not matter often when a client is looking for a condo as a vacation home because it does not matter how long it takes to get it sold. On the other hand, if someone is moving to the island and needs to get in a property we normally don’t look at short sales.
In a foreclosure, the bank already owns the property and there is normally a faster turn around time.
A lot of people feel that there are some excellent values available in short sales, but you must be willing to wait.
Click here to check out our Hilton Head Island short sale and foreclosure properties.
