There are three main types of Portland real estate sales.
While there are many other "types" of home sales in the Portland Metro area, I just want to point out the most common. Lets take a look at some of the similarities and differences between the three.
Usually easy to find, finance and close
Not always the easiest to negotiate
May be overpriced, but not always.
Most Realtors are well versed in the fair market process
Properties are often occupied (not vacant)
Owner impact on the property will be more obvious
Owner may be willing to make repairs
Owner may be willing to add closing costs
Relatively easy to find in today's market
Financing may be hindered by property condition - may require a renovation loan
May be damaged by previous owner - or may need more repairs due to previous owner's inability to keep the property up during their financial struggle
REO companies do not like to do repairs - normally sold "as is" - may do system repairs due to necessity
Prices tend to be lower because it's a foreclosure
More room for price negotiation than short sales
Closing is about the same as Fair Market once a contract is ratified
REO companies may be willing to add closing costs
REO companies want things to move swiftly once the contract is ratified - they don't like contingencies
Buyer may be subject to per Diem fees if he/she is responsible for a delayed closing
Not all Realtors are familiar with the REO process, but it is easier to learn on the job
Also easy to find in the current market
Listing price may not have been approved by the lender prior to listing
Will require more time to secure contract acceptance and ratification - can be as long as 3-6 months, and beyond. There are signs that banks are finally accepting the inevitable and are processing short sales more quickly.
Just because a seller says yes to a purchase offer doesn't mean that the buyer has a good contract. The third party may not accept the buyer's offer. Then again, the third party may counter the offer.
The buyer cannot fall in love with the property. There are numerous things that can go wrong.
Financing is similar to fair market financing
If the buyer has the time, patience and money to buy, it can be a great option. Many short sales are equal to and/or lower than foreclosure prices.
Not a good choice if time is a factor
Houses tend to be in better condition
The short sale lender will almost never do repairs.
Short sale lenders do not like any contingencies
Short sale lenders do not like to offer closing costs
Short sale lenders may try to change the rules at the last minute affecting Realtor compensation and seller contributions to the sale
Not always vacant
Not all Realtors are familiar with the short sale process - this can hinder the entire process
He can be reached at 503.961.2181 or by e-mail at email@example.com
Originally posted on West Linn Real Estate.