Santa Barbara REO's, Short-Sales, and Foreclosures
Pursuing Foreclosure Properties
Foreclosure properties, which is a non-technical term used by today's home buyers, are a very hot topic. As such, I wanted to address the two classifications and technical terms for foreclosure homes, and what each process entails if you were to pursue them as a home buyer.
Short Sales:
Short sales are homes that are currently going through the foreclosure process, but have not become banked-owned yet. In this process, the homeowner has to classify for being in financial duress and can no longer make their mortgage payments. They approach their bank and a real estate agent and all three parties work to sell the home before it goes through foreclosure process and bank to the bank. These homes are sold for less that what is owed on the property, so not only is the homeowner losing all their equity, but the bank is also taking a major loss. Sometimes the bank is willing to do this though if they consider it to be the "lesser of two evils". Often times, if they take a property back in foreclosure, they have repair/maintenance costs, legal fees, marketing costs, etc. They also are severely limited in the amount of money they can lend out based on the dollar amount of real estate they are holding in their portfolio.
While Short sales can be lucrative opportunities, the vast majority of the time they are extremely frustrating for buyers, so I also caution my clients against moving forward on one of these properties. While the seller may approve the offer right away, the bank or banks may not give final approval until 8-10 weeks, or more. I had one recent client who waited 100 days for the Bank's final approval until they told us "no". It was an extremely frustrating process for all parties involved.
Further, there has been a rise in short sale fraud being committed by some banks with the allegation being that when holding a second deed of trust against a property, the banks are asking for extra money "on the side." This is one of the many reasons to utilize an agent in your Santa Barbara real estate search or Montecito real estate search who can help you navigate the issues specific to your local market.
REO's (Bank-owned, Foreclosure property)
As to the owner foreclosure situation, these are classified as REO's or Real estate owned properties (Bank-owned properties). These are properties that have gone all the way through the foreclosure process and are currently owned by the bank and on their books. The banks are very motivated to sell them and as a home buyer, the process of buying one of these homes is very similar to working with a typical seller. REO's are some of the best deals on the market if you contact me, I can put you on a list to receive ALL of the weekly REO's that come on the market
There are some caveats to working with a bank when buying an REO. One of these is that they will counter your offer with a standard, typically 8-page, counteroffer/addendum that basically states that they know nothing about the property and that they don't have to fill out the same disclosures as a typical seller. In addition, banks can be less flexible as far as creative offers and prefer "As-is" offers where items such as repairs, pest work, etc. are already incorporated into a lower offered price by the buyers. They can also be less flexible during escrow if issues arise, and can charge daily fees if escrow is delayed. All-in-all, I highly recommend not pursuing short sales, but definitely pursuing bank-owned properties as well as properties listed by conventional motivated sellers.
Your Santa Barbara REO, Short-sale, and Foreclosure Expert
As highlighted above, there are many caveats to locating, analyzing, and pursuing bank-owned and other distressed properties, and as such it is critical to have representation that has the experience and expertise to assist you. Contact Daniel Zia, your Santa Barbara Realtor, to help you locate the right distressed or bank-owned property, and to walk you through each step of the buying process. Daniel Zia is an approved Short Sale and Foreclosure Resource and ready to assist you in your Santa Barbara real estate search.
Allow Daniel Zia, voted as the #1 Realtor in the Santa Barbara Independent's "BEST of 2009 Readers' Poll" to assist you in your REO and Foreclosure Search with his extensive knowledge of the current Santa Barbara REO and Foreclosure Market.
To contact Daniel Zia, please call (805) 637-7148 or email Daniel@ZiaGroup. Follow all the latest real estate news on the Santa Barbara Real Estate Blog or Follow Daniel Zia on Twitter. The Zia Group Team looks forward to serving you and your Santa Barbara Real Estate needs.
Here is what a local Santa Barbara REO Asset Manager had to say about the ZiaGroup's ability to represent the current market: "I needed an REO agent in Santa Barbara. I am very happy to have found the Zia Group. I was very impressed by the professionalism of the entire team. Everything was done in such a timely manner and I never had to ask for updates. I especially appreciate the flexibility and willingness to work with us, regardless of my request. I could count on Daniel to just get it done. Daniel is officially our Santa Barbara listing Agent."
Your Montecito REO, Short-sale, and Foreclosure Expert
Montecito REO properties can be found using the ZiaGroup's services, as the ZiaGroup team provides clients with early access and advantages in the Montecito REO process. As mentioned, it is critical to have representation that has the experience and expertise to assist you. Contact Daniel Zia, your Montecito Realtor, to help you locate the right distressed or bank-owned property, and to walk you through each step of the Montecito REO buying process.
Allow Daniel Zia, to assist you in your REO and Foreclosure Search with his extensive knowledge of the current Montecito REO and Foreclosure Market.
To contact Daniel Zia, please call (805) 637-7148 or email Daniel@ZiaGroup.
Resources when buying REO's and Bank-owned process
- Receive a weekly list of REO's, Short sales, and Foreclosures
- Search the Santa Barbara MLS for REO's, bank-owned and other distresses property.
- Contact Us for information on upcoming REOs or other pocket listings that are not yet on the market or in the MLS
