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Regional Multiple Listing Service.
Foreclosures and Short Sales
Seems to be what everyone is interested in these days. First the basics:
A Foreclosed Property or Foreclosure is one where the bank/lender has already taken back. The seller is the bank and buying one of these properties is much like a traditional real estate transaction. We're still able to get seller concessions and have them make repairs, etc... Being a foreclosure property only adds less than a week to the whole process.
A Short Sale or Pre-foreclosure is a whole different ball game. These are when the bank has not taken the property back yet Or the seller just realized they are going to get less than they owe when selling thus it becomes a "short" sale and the bank must approve any offer the seller agrees to. This is where the problem lies. The banks / lenders are so inundated with these files and so backlogged that it's taking them way too long to respond. I've been a party to several "short transactions" where the buyers have walked away / moved on because the bank hasn't responded. There is a definite process the bank has to go through with each property (touch many different hands) and it is not quick. The most frustrating thing is that there is absolutely nothing the buyers agent or buyer can do to push it along.
Short sales transactions are so dependent on the listing agent doing their job up front, open preliminary discussions with the bank, establish contact with the decision maker, provided requested documentation to the bank, etc... The problem is that many of these listing agents do nothing until they get an offer. This is where the transaction can take up to 6 months or more...