Real estate is very regional and depends on the market you are buying in. I am a realtor here in Orlando Florida, and I can tell you the properties which are currently selling are aggressively priced resale homes or Bank owned REO homes. Short sales are very difficult to sell because there is so much uncertainty to them, and in my experience both with short sales I have worked on and also from info from colleagues Short sales very rarely sell for the list price, and can sell for a lot higher simply because unlike a bank owned property the bank doesnt take care of any and all liens on the property from the outset. These have to be negotiated as well which is one of the reasons for the long time frame.
Also, the Seller does not pay for all the closing costs. you are responsible for the buyers costs such as doc stamps on the note etc and the seller is responsible for their costs. Indeed some will even say buyer responsible for all closing costs, so you need to check the listing carefully and ask your realtor this.
On bank owned properties and regular resale homes your realtor's commission is paid for by the seller. In a short sale, this is not neccessarily the case. When you work with a realtor they will have you sign a buyer brokerage agreement. In this it outlines their charges. On the types of sales I mentioned before their costs are paid for by the seller. However, in a short sale, the realtors commissions may be reduced as part of the negotiations. In which case, if this amount falls below your realtors charges then you would have to pay the short fall at closing.
Short sales contrary to popular belief are not the best deals people think that they are and in many instances can end up costing a lot more than a bank owned REO property which is aggressively priced.
If your realtor has not had you sign a brokerage agreement and not told you about the pitfalls with commission or short sales in general then buyer beware. Any Realtor worth their sale will tell you all of this before beginning any search so you have all the facts and info to begin with. A lot of times new realtors who do not know what they are doing do this because they need clients to build up experience and learn as they go. This is not good for you as it means they are using your transaction to learn with.
Also beware of sellers requiring a high deposit. It depends on the cost of the home but if your buying a property for under $100,000 i recommend a $1000 deposit. Above that and it depends on the price.
I think you also asked previously what does BOA mean. It stands for Bank of America.
Most Bank owned properties will require you to be pre qualified with their own lender (i.e themselves), although you can use whomever you choose ultimately. The reason for this is they dont want the sale to fall apart because of the financing contingency, so they have you qualify with them so they know you are a serious buyer.
I hope this helps.
Nick
I really need some help.We are thinking of buying a vacation home in Davenport that will eventually be our primary home.We are looking at a short sale.The realotor said the bank has already approved the purchase price and that short sales take a long time to process.I am fine with the time frame because we live out of state.I just found out that I must put 20% down which was a suprise.I have no idea about any of this and feel DUMB!!If the bank has already approved the short sale price does that mean I cant make an offer?Do you pay closing cost on a short sale?How does the realotor get paid?We bought this home eleven yrs ago,but my husband-who is out of town for several months now-took care of everything and now acts like he cant remember a thing!While we are waiting on the bank to accept what if I find a better house?Can I get out of the deal?Any and all help will be appreciated.I am so stressed!
