Today’s answer to the question would be a much different answer than a year ago. In fact for the years 2008-2011, the bargain in the market place was most definitely bank owned foreclosures. Fast forward to today, and the very best bargain in the marketplace is unquestionably short sales. Why? Well, first, the bank owned foreclosures are lower than they have been for years. The rule of supply and demand applies here – little supply with lots of demand for the foreclosures is causing them to be bid up in price taking them out of the realm of a bargain. That leaves the “other distressed sale” – short sales (does this sound like the pork ads – the “other white meat”?). In fact short sales typically give the benefits of the equity sale (homeowner still maintaining the home) with the bank pricing that used to be part of the bank owned sales.
Why has it taken so long for short sales to become the purchase of choice? In short, the past performance of the banks. For far too long the banks floundered and failed to get their short sale processes in place to expedite these sales. At long last, improvement has come in the form of more approvals in better timeframes. At last we can truly recommend them to both our sellers and our buyers.