We have all seen the countless short Sell properties available and what seem like huge savings. One of the hardest hit areas of Southern California with disingenuous pricing is the Corona. I have watched the area for the past few weeks and I am very surprised to see the listing prices of Short Sell and Bank Owned properties when compared to the actual sell price. It appears that these assumed great deals often turn out to be not such a good deal at the end of the day.
The current listings on the market today are Standard Sales, Short Sales and Bank Owned. A Standard Sale is negotiated directly with the seller and once a price is agreed upon then your sale is accepted. No bank approval required. No bidding war games. No games played in this type of transaction.
On a Short Sale or Bank Owned transaction your offer has to be accepted by the listing Broker, which usual means the highest bidder. I find it odd that there is usually a 90 day window for the listing Broker to get a property of this type sold and there is no answer on your offer until the 90 days are nearly up. Would this be a open bid? You decide.
Here are three homes within a few minutes walking distance. The first is a property located at 995 Trovita Drive in Corona CA. This is a Standard sale transaction and this property does not have Mello Roos Tax. The property in my opinion is fairly priced and there are no bidding war games. Here is the Zillow link to this property – http://www.zillow.com/homedetails/995-Trovita-Dr-Corona-CA-92881/17768366_zpid/
There is a larger home just a few minute walk from the 995 Trovita Drive home. This is a Bank Owned / Short Sale listing. The home has been on the market several weeks and I am aware of several offers that wanted to be made on this property. To be fair I am not sure if the offers were actually submitted but I do know the price has been lowered twice which is far below the estimated value of $546,000. So why would it be listed for $464,900? Would it be to cause a bidding war? I will be watching to see what this property actually sales for. Here is the link to this property – http://www.zillow.com/homedetails/963-Haley-Talbert-Dr-Corona-CA-92881/52496413_zpid/
Here is a resent confirmed sale of a property that is smaller than both of the above properties. This was a Short Sale transaction and as I understand it listed for $329,900 and sold for $340,000. This is far from the worst over bid that I have seen but clearly shows that the home sold for more than the listing price. So how and why does this happen? Well we look for a good deal and then emotion takes over and we over pay. So what should the value of the above homes be when compared to this confirmed sale? Price per square foot is far below this home. So what do you think? Here is the link to this property – http://www.zillow.com/homedetails/1110-Pampas-Cir-Corona-CA-92881/17767836_zpid/
The point of this story is to not fixate on a specific transaction type. The best deals are still on Standard Sale transactions. That is not to say you can not find a good deal on a Short Sale but they are often not as good as you would think. Something to consider, Short Sale transactions do not have full disclosure to the buyer. The banks do not have to disclose if there is anything defective with the property that they are selling. So if you look at the fine print these transactions are sold “AS IS” and often are not eligible for FHA financing. Does this tell you anything? Well the answer is yes it does. Do your home work before you purchase a property in this type of transaction.