SW Florida Real Estate Information

Cape Coral short sales and foreclosures are abundant. If you are considering purchasing a short sale or foreclosure in Cape Coral make sure you have the right information to make a sound decision.

Many buyers are not in a position to purchase a short sale and some short sale listings are not priced correctly.

The buyer's needs.

If you need to buy a house within the next 30-60 days a short sale property most likely will not be for you. Unless you can find an approved short sale where a previous buyer backed out or was denied from the lender. In that case you may be able to close quickly.

Let's look at the listing price.

Banks will often times approve a short sale for a qualified seller but only if the numbers make sense. If the offer is too much below market value the bank most likely will not accept the low offer. How do they know? The bank will send out either an agent to perform a BPO (broker's price opinion - similar to a CMA) or hire an appraiser to do a full appraisal on the property. When that figure comes back in they are looking for an offer at that price or some percentage less than that price.

Ask your real estate agent to provide you with comparables before you waste your time making an offer on a house that may be listed well below market value.

Have patience.

Complete your due diligence. Get your financing in place. Make sure you have your pre-approval letter or proof of funds letter ready and be ready to have your inspections.

Cape Coral foreclosures can be a great opportunity to purchase a great deal. But these homes are often times selling quickly & with multiple offers for buyers to compete with. Make sure you are also working with an agent who understands the market and can help you determine the value of the house so your offer wins!

This is a great question that I get asked on a daily bases. There are two big differences. A property being sold as a Short Sale is still owned by the current home owner. They are in default on their mortgage and instead of being foreclosed on and ruining their credit more, they ask the bank to accept a short sale and take less then what is owed to the bank, it's the banks choice to take this or not and some banks are not offering this option anymore. A Bank Owned Property (BPO) or REO (Real Estate Owned) is a property that has already been foreclosed on and has been taken back by the bank and is being sold by them.

I have put together some pros and cons of purchasing a foreclosure or short sale property.

Short Sale PROs:

1. Depending on what stage the short sale process is in, some homes are often times in a move in ready condition (most home owners may still be living in the home which means the home is in better shape)


Short Sale Cons and things to think about before you purchase:

1. A short sale listed price is set most likely from the listing agent! The price you see has nothing to do with what the Lender will accept! Hopefully the agent did their home work and listed the property at current market value, because the Lender will get an appraisal and if the appraisal is higher then the list price, be sure that the bank will want that appraised value! They will not accept a lower price!

2. The Lender or Lenders have a process in order to forgive the sellers dept and the average time frame to get a response on an offer, can be up to 6 months.

3. If the current seller has more than 1 mortgage on the property, the short sale process can take even longer!

4. Sellers usually have no money to make repairs to the home and the lender will not repair anything either. So you will be purchasing the home ASIS!

5. Depending on what stage the short sale process is in, most often right before the property goes into foreclosure, some homes are often in a horrible condition! Like missing appliances, missing air conditioner units, all ceiling fans and lights missing, if the property has a pool the pool equipment may be missing, screen enclosures may need to be repaired or even replaced, walls may have holes in them, carpets may need to be replaced and so on. Remember you are purchasing this home ASIS!

Foreclosure/Bank Owned Pros:

1. Usually you can get a response to your offer within 24-72 hours. (In worse case within 7 days)

2. Price is generally below market value, sometimes way below, meaning you truly get an outstanding deal, but only if you do not have to sink a lot of money into it! Remember you are purchasing it ASIS.

3. The price on the listing is a price the bank will accept no guessing.



Foreclosure/Bank Owned Cons:

1. Some bank owned homes need TLC - New flooring, paint, missing appliances, missing air conditioner, missing fixtures and so on that were taken out by a angry home owners.

2. Since the prices are usually below current market value there are often times bidding wars, so be ready. Homes normally have multiple offers on them within the first few days of entering the market and the bank will only accept highest and best price.

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