Foreclosures / REO Properties

The Las Vegas market is currently saturated with bank owned homes or what some refer to as REO properties (real estate owned properties, in bank terms). There are also a good number of short sales now available. While both types of properties represent a distressed situation, they are in fact very different.

Repossessed homes: These properties have already gone through the foreclosure process and are now being marketed by the financial institution that owns them. We have found that they are typically priced very well. In a good number of cases, when some repos come on the market they often obtain multiple offers fairly quickly. In some cases these offers are presented on a first come first serve basis, and in other cases they are in fact collected over a number of days and then presented in bulk to the various sellers. This is important for you the buyer to understand. When we represent buyers making gofers on bank owned properties, I explain this process and also explain that the time frame to allow for a response can take upwards of two weeks or more from some of the listing agents! There are a number of issues to be addressed such as time frame for inspections, earnest money, as-is waivers, determining value, and many others. These are the types of questions that we can assist you with and I can say we have had good success in getting our offers accepted.

Short Sales: In a nutshell, here we are dealing with a private seller that owes more on the property than the home is worth. That seller is typically negotiating with one or more lenders that hold mortgages on his home to take less than what is owed (a “short payoff”) and allow the seller to sell the home. The big caveat here is not only must the buyer qualify for the purchase but the SELLER must also qualify for the short sale. In some cases, they do not! You should understand that the asking price on these properties often has not been approved by the banks that hold the notes on the home. Therefore you could make an offer at the asking price, wait weeks or months, and still not get your offer accepted; or even rejected! There is generally a large time lag to consider on these offers. This lag time is improving and with the new HAFA program rolling out in April we all hope to see the time lag shortened. Currently short sales make up about 50% of the homes for sale in Las Vegas! The key is to find sellers that are good candidates to be approved and agents that know what they are doing to process and negotiate a short sale.

In order to differentiate your search between REO (bank owned listings) and short sales, click the Foreclosure tab under the Search column and you will have two choices: Bank/lender owned or pre-foreclosure short sale. You should know that pre-foreclosure refers to short sales. One more point: when repos are sold, it is often the case that offers are emailed to the bank representatives for signatures. There can be a verbal acceptance and a time lag between when the acceptance took place and when a property is designated “pending” in MLS. So you will occasionally find properties shown as “active” or available when in fact they are under contract. Just another one of the idiosyncrasies of purchasing repos!