What is the time frame for a property to go from a short sale to a foreclosure. I have noticed properties that were listed for approx $350k & not selling go into foreclosure way below price. Do all the properties go into foreclosure if they do not sell on a short sale? I will be taking a foreclosure class through my association at the end of the month & hope to learn much more.

Thanks.

not everyone tries to do a short sale or even tries to sell. That is a decision of the owner. Most short sales are never approved. It depends on the state laws from when the foreclosure filing starts to when the foreclosure sale is. You should learn all of this at your foreclosure class. However they might not teach you anything about short sales as that isn't part of the foreclosure process.

From a frustrated agent. Short sales are an attempt by an owner of a property to sell their property for less than what is currently owed to the lender. In order to successfully complete a short sale, you need the lender on board to accept less than what is owed. Short sales are handled by a different department of the lender. This department may be known as loss mitigation or risk managment (depends on the lender or servicer). Typically, lender does not want to accept less than what is owed and typically the approval process can take a really long time, once an offer is received. Most buyers walk away while waiting on the lender's approval. Typically, the lender would have received more as a short sale than as a foreclosure.

Sometimes, a property isn't offered as a short sale. A borrower misses x number of payments and the lender takes the property back (foreclosure). At this point, a different department of the lender takes over. The object once the property has come back to the lender is too get the "asset" off their books in the quickest amount of time, with minimal carrying costs with the greatest return possible.

Two very different animals and two very different departments of the lender at work. They do not communicate and apparently do not play well with others (joke).

I am going to show a listing that is a short sale, it was listed @ $445k in April and Cancelled, now it's back as a short sale for $249k. The addendum states they have 45 days to reply, if they have not replied within that time frame then the contract can be cancelled. Has anyone placed an offer under these terms? I know the process is long & I had someone back down from one but I am usually able to write the time frame my buyer is willing to wait just like any other contract. This will tie up my buyer to this property until further notice!

Since the price is set most likely by the seller or listing agent to me it's a waste of time. With that low of a price the listing agent is hoping for a multiple bid situation and to submit multiple offers to the bank hoping something will stick and the bank will accept.

Remember if the bank won't accept you have squat! I would check to see if this property has one lien on it or multiples. You could get an approval from the bank only to find ther eis a second on it or multiple leins that make the pruchase price unfeasable. I work these for my own investments but don't list them anymore. Yoo much time for to little commission.

I checked the records & they owe 2006 & 2007 taxes. How can you find out if the property has a line of credit against it? When an offer is accepted on a short sale they have already checked all the loans against it & that is why they take so long? I am sorry I have not done a short sale, I have tried to stay away from them.

It really depends on what a BPO says the property is worth. They may do two BPO's and possibly a apraisal. If the property was listed for 450K and the comps say 300K then the bank may work with the 300k. They will also most likely want the buyer to sign a promissory note. If there is a second lien holder things can get more complicated. Do your own research and comp out the property. If it sounds too good to be true...it is.

NO the first bank knows nothing of what else the seller owes. If there is a second involved not owned or serviced by the same bank then they will want a letter stating the 2nd will accept (usually 1,000 or so) form the first to wipe out the second otherwise they will just foreclose.

In our county we can check online for liens but your state and county may or may not have that capability. You could call your title company you work with and ask them to research it real quick or go to the courthouse yourself.

Same thing with other liens the senior mortgage will want letters in writing that the liens are settling. The reason is the loss mitigator for the bank doesn't even want to work the short if not everyone is on board or they just wasted time and they have hundereds of files on there desk.

Property taxes supersede everything even senior mortgages. The laws were enacted this way to ensure local cities and counties would have revenue to operate public services fire,police,medical,schools etc. This is also why they can sell tax liens to get payment now for county/city operations.

Everything hinges on the bpo the bank will order to determine value while looking at the offer. If the value comes in high you are dead in the water.

Telling you upfront get ready to have a big headache. Is there not an REO in your area that is a good deal? We have thousands of them here.

Yes, there are a few REO's, one of my buyers closed on one in the same area for $264k, listing price. It was an excellent deal, after loosing on one & doing my research I noticed that the best bet was to offer list price so we did & got it. I was staying away from short sales due to all I have read but there are many in my area. I was surprised that they are being listed so low & that is what buyers are looking for. I dont think my buyer will make an offer on the one we will look at, she is looking more to low $200's rather than $245k & that is low enough for the area plus the 45 day wait is too long to get locked into something that you don't know the outcome. I will try & continue looking for REO's as I was doing.

I appreciate all your input.