Have you heard the good news?
Real Estate prices and mortgage rates are very favorable for home buyers in Yuba City or Marysville CA. Banks and mortgage lenders are willing to write off thousands of dollars of bad mortgage debt, thereby lowering the value of homes they must sell!
There are two types of distress sales now available: Bank Owned (REO – Real Estate Owned) and Short Sales. I will explain the unique differences between the two types of real estate transactions.
Bank Owned, or commonly referred to as “REO” are homes that the bank has completed the foreclosure procedure and now owns the property. The Yuba City home is offered for sale at a price that the bank believes is the fair market value. All liens including; Second Mortgages (junior liens), Mechanics Liens, Delinquent Property Taxes, etc are eliminated in order to transfer a clean Grant Deed to the new owner with no encumbrances on the subject property.
Short Sale properties are found in three conditions:
- The seller is negotiating with the bank to determine fair market value and a sales price that the bank will agree to. Many times a second mortgage is involved making this process even more difficult.
- The bank has already agreed to a fair market value and arrived at an acceptable sales price and terms of sale. Junior liens may or may not have been negotiated with in this instance.
- The seller has completed the HAMP (loan modification process) and was denied, then applied for the new HAFA short sale program and was approved. The bank can quickly agree to a fair market value and sales terms. Any second mortgages or other lien holders will receive a minimum payment. Clear title can be transferred to the buyer.
The best situation for a buyer is conditions 2 or 3 whereby the bank has already agreed to a sales price. The optimum situation is condition #3 because the bank is required to respond to an offer within 10 business days; plus, the sales price and terms of sale are clearly stated so there is less confusion as to what the bank is requiring to close the sales transaction.
When considering which Yuba City properties to consider purchasing, I recommend looking at those properties that are REO or HAFA short sale approved first. All other distressed property transactions are subject to long response times from the bank plus issues dealing with other lien holders.
I hope this information will lead you through the “Foreclosure – REO – Short Sale” jungle of confusion. Many fantastic homes are now available at ridiculous prices, banks and lenders absolutely need to get these properties off their liability records. Do not let this once in a lifetime opportunity escape you! Please contact me if you need further information. Thank you!