Avoid The Surprises Of Buying Bank Owned And Short Sale Properties By Knowing These Key Differences

We have often heard of bank-owned and short sale properties, but what is the actual difference between the two of them? When putting in a potential offer, you'll want to understand the difference to avoid frustration.

 

 

*The bank initiates the sale of the home. The process starts when a homeowner is unable to make payments. The bank forecloses on the home. The bank takes ownership, and the owner is no longer living at the property.

• The bank has clear title and ownership 
• Typically can close within 30 days
• Similar to a typical resale transaction

 

*The homeowner initiates the sale of their home. They have stopped making payments, and the bank doesn’t have ownership. However, all terms must be reviewed and agreed upon by the buyer, lender, and seller for the home to sell. The listing agent and seller set the price, but the lender has to agree. Since the lender must approve all terms, the process can be lengthy and unpredictable. 

• Does not have a clear title
• The seller owes more on the property than what it's worth
• Must negotiate with the lender
• Takes more time

Whether you're a first-time buyer or looking for a new investment property, finding that perfect deal can be tempting. There are deals to be found, but understanding the process and knowing if it's a good fit for your situation, is critical.