Foreclosure, Standard Re-Sale, or Short Sale: Which type of sale is the best in IRVINE?

by Robert Mack on August 14, 2009

in Irvine Real Estate

There are 3 types of sales that we are experiencing in current IRVINE market place….No one sell is better than the other, however knowing more about each type of sale may help you understand the pro’s and con’s of each type of sale. 

1. Standard resale homes – This is where you are actually negotiating with a real life seller who has equity in the home that they are selling.  This is a very popular type of sale and very attractive to buyers because if a buyer submits an offer on a standard resale home, they will receive a definite answer within 2-3 days.  A main drawback with these types of sales is that in many instances, most home sellers have still not made the complete adjustment to the market and in many cases they will over price their home to net the most amount of money off the sale of their home.  In addition, the competition is stiff because most home buyers are not willing to wait the time it takes for a short sale.   

2. Foreclosure – This type of sale is the most popular right now.  In this case you are negotiating with the bank who owns the property through a deed in foreclosure.  Similar to the standard resale home, you will also receive a definite answer to an offer within a couple of days so.  The bank has already approved the list price and will accept any offer at or above list price in most cases.  The purchase price of these homes are still negotiable, however the reason why these homes sell very quickly and in most cases above list price is because the banks usually list the home at 5-10% below market to obtain multiple offers on the property.  This way they can choose the highest and best offer.  Many buyers associate foreclosure to “great deal”, and therefore, most buyers right now are looking for only foreclosures.  There is stiff competition and to get an offer accepted, we must be quick, prepared, and present a strong offer to the bank.  If a bank owned home is listed on the market for over 10 days, it is most likely overpriced and it will just stay on the market until they get realistic(because most banks want list price or above).  This type of sale is also referred to as a Bank Owned, Bank Repo, R.E.O. 

3. Short Sales – this type of sale is probably the most UN-popular with buyers in our current market place.  A short sale is when the sale of the home will result in an amount which is less than what is actually owed on the home.  With this type of sale, the home seller works with the bank to get them all of there information such as paycheck stubs, tax returns, bank statements, etc.  The bank will first decide whether or not they qualify to do a short sale.  If they do qualify, they wait for an offer.  The problem is that if an offer is submitted, it will take the bank roughly 2-6 months to come back with a response.  This happens because they are so backed up and understaffed and many people have to review the overall net/loss to them.  In many cases, the buyer who has an offer on the home normally backs out before the bank even comes back with an answer because other better opportunities pop up.  This type of sale is also referred to as Notice of Default(N.O.D.) or Pre-foreclosure. 

The first two types of sales are the most popular for one reason.  You will receive a response from the seller within a week.  Most buyers now are looking for the right home and when they find it, they don’t want to wait up to 6 months to hear back from the seller.  You will also learn more about the different types of sales as you look at more homes.  It is really a hands on experience.

For more information on the above types of sales, contact Robert Mack at (949)209-7309

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Post by Robert Mack

Robert has written 727 articles.

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