Buyers: Choose REO Listings Over Short Sales!
Posted Mar 7, 2008 @ 12:46 am, Viewed by 718 Visitors, Read 765 Times.There is nothing more aggravating than attempting to buy a short sale home - it is simply not worth it if an equivalent REO listing is available. The reasons why short sales are the biggest sham in the market today are:
1. They are no "cheaper" than comparable listings because banks refuse to deal for less than market on a short sale, despite its stated purpose: to sell short of the loan amount.
2. It takes literally weeks to get an answer from the bank, and even then, some bank do not give guidance as to what price they will accept. They just simply say "no", the offer is too low. How many buyers are willing to wait 4 weeks just to hear "no"?
3. The listing agent is powerless to help the buyer convince the bank of the strength of the offer price.
4. Equally appealing homes can be purchased cheaper as an REO (bank owned) listing where the response to an offer is counted in days, not weeks.
Then why should anybody ever take the time to puchase a short sale home? Simply put, they shouldn't. There is no way of knowing whether or not your offer will be accepted despite making an offer on the listing price. This lack of predictability makes any short sale purchase a complete sham in my opinion. More importantly, if people stay away from the short sale, eventually it will return to the market as an REO listing, which is much better managed through a different department of the bank. So as you are looking for "steals" at Eastern Columbia, Elleven, Biscuit Company Lofts, Luma, 1100 Wilshire, Sky Lofts or Promenade West, keep in mind that a "short sale" is going to come up short.
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My name is Quinn Kiet, and I'm the broker of the L.A. Condo Store – your Downtown Los Angeles Realtor. With the L.A. Condo Store, you're receiving the sophisticated services of a boutique brokerage dedicated to bringing the best of what Downtown L.A. Read More
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I can feel your pain with the short sales but I've had agents in my office following advice like yours above and have been unsuccessfully making offers to purchase REO's with for 4 months +. If a buyer wants a good deal on a turnkey house and they are only a 3.5% down FHA buyer their chances of getting an offer accepted on a REO they like are slim. I've listed and sold a # of short sales and I've also represented buyers that have purchased short sales. You have to understand the way the banks, listing agents and sellers think to get your offer accepted. You have to know what questions to ask the listing agent to determine if making an offer is worth your time. Its very similar to the approach you need to be sucessful submitting offers on REO's. I can gurauntee you that buying short sales is not a waste of time. I've listed, worked with buyers and purchased property for my own account via short sales that have been _EXCELLENT_ deals. I can provide addresses/APN #'s and you can look at public records yourself to see if I'm lying for anyone out there that doesn't believe me... 310 874-1278