Short Sales vs Foreclosures

What are REOs (Real Estate Owned)?  REOs are already foreclosed on properties and are Corporate Owned by a Bank or Asset Management Company.  Foreclosures in Venice Florida can afford buyers a bargain, but today's home buyer needs to know how the game is played and understand that Foreclosures are not like regular residential real estate transactions. 
 

Tips for buyers who want to have a successful foreclosure transaction:

• Cash is KING, pre-approved financing is less alluring.  If cash purchase get a verification of funds (bank statement or letter from financial institution on their letterhead).  If financing make sure they are using a direct lender, not a mortgage broker.  Get written pre-approval letter.  Work with Listing Agent and Lender to confirm that REO properties is financeable (some are not).
• Avoid low balling; properties are usually priced to sell.  In the Venice/Englewood areas our REO's typically sell 5% - 25% above list price.  Pull sold comps up of recent foreclosures to help prove to your buyer if they want to win the deal they need to submit their highest and best offer first.
• Avoid unnecessary contingencies, keep your offer clean.  Corporate Owners would rather give credit at closing for unexpected repairs; list price is already adjusted for current condition.
• Communication with the Listing Agent is essential.  Email is the preferred method of communication as the Listing Agent is so busy they do not have time to return phone calls and you could easily lose the deal by not communicating with the Listing Agent by email.
• Don't expect extensive negotiations.  You may be able to negotiate once or twice but after that you will be turned down.  Corporate Owners do not have the time to negotiate as they usually are presented with 50 - 150 deals every day and need to make immediate decisions.  They don't have time for games.
• Corporate Owners want clean deals and will strictly enforce the closing date charging Extension Fees of $300 and a per diem of $150 until day of closing.  Make sure your Buyer's lender is aware of the urgency of closing on time.  Allow for potential delays to closing in your offer (common delays to closing - inspections, lender delays, title issues, code and permit issues).
• Closing time frames:  30 - 45 days for conventional financing, 15 - 30 days for cash transactions, 45 - 90 days for FHA transactions on average.
• Corporate Owners control the closing and demand to use their people to close but will pay for it.  Read all addendums carefully (may recommend attorney review).  Addendums are constructed for the protection of the Corporate Owner and any alterations will not be accepted.
• Mail away closings (when closing paperwork is mailed to the home buyer for signatures) are common.

Most home buyers come to find out that buying a Foreclosure in Venice FL can be a daunting process.  It is essential you work with someone who knows how the process works to ensure a successful transaction.