REO vs. Short Sales What You Need to know before You Buy                                  

It can be argued that the best deals in the Fremont real estate market are distressed properties. REOs and short sale properties have flooded the Fremont market, and buyers are taking advantage of the lower prices of these properties. REOs are some of the hottest properties right now, with many being sold within days or even hours of becoming available. Why are they so appealing? Quite simply; they are priced to sell. But it's important to understand what is involved with REOs and short sale properties and to know what you're getting yourself into if this is the route you decide to take.

REOs are properties that banks have foreclosed on after the homeowners have not been able to make payments. Banks are left with the burden of maintaining the properties and selling them. In areas where thousands of properties have foreclosed, the expense can be enormous. In order to unload the homes, banks often price them below market.

Short sales are a bit different. These are properties that a homeowner owes more than the value of the property and the lender has agreed to sell for less than the amount owed on the mortgage and forgive the seller their remaining debt. If a bank believes it can avoid less of a loss, they will sell the property short rather than putting it into foreclosure. Buyers usually have the opportunity to purchase these at current market prices or a little below.

Foreclosures, REOs and short sales in Fremont can absolutely be some of the best deals out there, but they are more complicated to buy than traditional homes. If you're thinking of looking in this market, here are some suggestions that might help your search:

• Find an experienced Fremont agent - Get a Fremont real estate agent who is specifically familiar with REOs and short sales and the processes involved in buying them. There are important details and steps when purchasing these properties and it's important that you work with an agent who knows how to get you the best deal possible.

• Know where and how to look - REOs and short sales are usually listed on the Multiple Listing Service and can be found on the majority of websites that feature properties for sale. You can see which properties are in the process of foreclosure on RealtyTrac.com or find homes that have already foreclosed on sites like Zillow.com,Trulia.com. If you do use these sites you must know that they are not always current and don't always have the best buys listed before their gone. It's always best to get a Fremont Realtor who is familiar with REOs and short sales as they will always have the most current information.

• Hope for the best, prepare for the worst -In all likelihood, you will not be "wowed" when walking through the door of a foreclosed property. The best foreclosed properties in great shape get multiple offers within days of being on the market. Most are sold "as is" and it's often the case that in the months leading up to foreclosures, a lot of homeowners disregard maintenance and let the condition of the home deteriorate. It's common to see homes stripped of appliances, light fixtures and any other items that can be sold. In the worst case scenarios, homes fall victim to vandals and transients who take advantage of a vacant property. Make sure to include the amount you will likely need to pay in improvements when setting your budget.
• Be patient - Transactions usually take a little longer when working with banks. Normally, you may hear back on an offer from the seller the next day. But that's not always the case when working with banks. An offer may have to be passed around for several people to review and approve. Banks only work during normal business hours and won't be considering your offer on the weekend or in the evenings. Expect a few days or a week to hear if your offer on an REO has been accepted. The wait for a short sale can be much longer because, unlike standard sales, there is no set closing time. If a lender thinks it can get a higher price from another bidder, put the house into foreclosure and sell it as an REO, or hold off until an upturn in the market, it won't mind waiting months on end to close. Complications also arise if more than one lender is involved. The second lender may have specific demands in order to receive as much back from their initial loan as possible. Make sure your Fremont Realtor is familiar with writing offers on short sale homes so you can get out of the contract if a better opportunity comes along after this offer has been given. So if you are trying to purchase a new house around the time you're selling your current one, a short sale property is likely not the way to go. Short sales can be more convenient for those looking for an investment property or first time buyers who are not in a hurry to move.

  • There are other fish in the sea - Don't worry if you don't get the first or second property you make an offer on. There will be others. Experts say we could see many months, if not longer, of foreclosures come on the market. Foreclosures can come and go quickly, especially those in good condition. Be ready to pounce, but don't be too disappointed if you miss out. Another property will likely become available soon.

• Ask for help - You may be able to find help with your down payment on a foreclosed property. Fremont has programs for first time buyers you may want to look into and your Realtor should have this information for you. Also remember that just because you are buying from the bank it doesn't mean the price is set. There is always room for negotiation, even with closing costs. It never hurts to ask. And as always, before you start looking you should first get preapproved for a loan. Foreclosure or otherwise, your offer will hold more weight with the seller or bank when they see you are serious about buying.

It's been a long time since we've seen such a large number of foreclosures on the market and people are jumping at the chance to take advantage of the lower prices. But these transactions can be much trickier than standard sales. When it comes to working with banks, it's a whole other ballgame as they say. A foreclosed property could be one of the best investments you make, but also the most complicated. If you take time to research and talk to Fremont real estate experts in your area, you will likely find yourself reaping the benefits of your investment for years to come.

There is a lot of free information available to you about buying, selling, relocating, or investing in the Fremont real estate market. For complete information about the Fremont Ca real estate market including current Fremont homes for sale, property values, market conditions and more please visit the most complete website dedicated to everything Fremont real estate related www.ClydeBrownHomes.com.

If you or someone you know are in need of a competent and caring Fremont agent in or near Fremont Ca, I hope you will contact me. Clyde Brown Legacy Real Estate & Associates.

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