• Home
• Buy
• Sell
• Statistics
• Neighborhoods
• Loans
• Search Tucson MLS
• About Tucson
• Blog

Buying Short Sales and Foreclosed Homes in Tucson

April 1, 2009 | By Kelley Koehler | Filed Under Tucson Foreclosures and Short Sales 

Been discussing this quite a bit recently with my home buyers.  Two very different situations if you’re trying to buy short sales and foreclosed houses in Tucson.

A foreclosed home – also called bank owned or an REO property – is one where the lender has completed the foreclosure process and now has taken it back and owns the home.  Banks usually list them with agents, who in turn offer them on the local Tucson MLS where you can see and purchase them.

In this situation, the bank really doesn’t have any knowledge about the house, so they refuse to make any disclosures and sell it as-is, more often than not.  The listing agent doesn’t have any information about the house either, other than what they can tell by looking and checking public record.

When you’re buying a foreclosed home, it is important to inspect very carefully.  There’s no one making disclosures, sometimes you have to turn on the utilities yourself at your own expense, and sometimes the condition is less than ideal.

However, these foreclosed homes are often sold at a discount, so if the condition isn’t terrible, you can often pick them up at good prices.  Also, the lender is usually highly motivated to sell the thing, so when you’re buying a bank-owned home, typically the bank will respond in a timely manner.  Timely meaning days, or a week, not months.

I’ve got a special site that lists foreclosed and bank owned homes for sale in Tucson over at TucsonBankOwnedHomes.com.  Click on the map to see a list of bank owned homes for sale in that part of Tucson.

Short sales, on the other hand, are very different.  "Short sale" means the lender comes up short at the sale – there’s not enough money made to pay off the loans.  It does NOT mean they sell quickly.  Quite the opposite, in fact.

In short sales, a real person still owns the house, not a bank.  As a buyer of a short sale, you negotiate with the seller using a special addendum, and then the seller goes back and negotiates with his lender(s) to see if they’ll take less than they’re owed.  This process could take – quite literally – months.  And there’s no guarantee that the seller and the bank will reach an agreement, or that the bank won’t just foreclose on the house anyway.  And if you’re dealing with more than one lender at a time, it all just gets messier.

However, if you’ve got plenty of time and plenty of patience, you may want to consider buying a short sale home.  These are usually as-is sales – the seller walks away from the deal without making a penny, so they’re not motivated to make any repairs.  They can take months to complete, during which time, you sit and wait for the seller and the bank(s) to reach an agreement – a process on which you have very little insight as the buyer.  Typically, the condition is a little better than in a foreclosed home.  The seller may still be living in the property, so they probably haven’t trashed it in anger.

These homes usually sell at a discount as well, though not typically as steep of a discount as a foreclosed home.  Just be aware that you might be dealing with a reticent distressed homeowner, that the lenders will have no regard for timelines, and that you’ll need lots and lots of patience.

Comments

Search this Site

Other Information That Might Be Helpful

• The Chances A Short Sale Will Actually Sell (May 5, 2008)

  I’ve got a buyer thinking about making an offer on a short sale property.
  Remember, a short sale is where the owner owes more on the house than they can sell it for.  They’re most often incredibly long, frustrating sales, and often, the sales never actually complete.  You have to get the lender to agree to [...]

• Comparing the Short Sale and Foreclosure Markets (April 3, 2009)

  Fun with numbers –
  # Short Sale Homes on the Market today: 1820
  # Short Sale Homes Sold in March: 143
  That’s a 12.7 month supply of short sales in Tucson.  Which means about 1 of every 13 short sales actually sell.
   
  # Foreclosed Homes in the Market today: 1614
  # Foreclosed Homes Sold in March: 417
  That’s a 3.9 [...]

• Search Tucson Foreclosures (February 8, 2010)

  I’ve had a couple of calls recently from people who only want to look at bank owned homes in Tucson.  They ask for a way to search for only foreclosures in the Tucson area.
  That, we can do. 
  If you click up on the “Search” link at the top of the page, it takes you [...]

Copyright © 2010 Tucson Homes, Neighborhoods, and Real Estate from Housechick.com