Search Twin Cities Foreclosure & Short Sale Listings
Foreclosures and short sales are two types of sales that come with some extra complication. At Schatz Real Estate Group we have the experience and knowledge to help guide you through the process of buying one of these properties or working out a short sale on your home. We’d like to share some of that knowledge with you here.
A foreclosed or bank-owned listing is found when a Bank has gone through the entire foreclosure process of repossessing the property due to non-payment of the mortgage. The bank now has complete ownership of the property. When a home owner is missing payments the bank can decide to initiate the foreclosure process. It will notify the owner and post a public notice of foreclosure. Then an auction, called a Sheriff’s Sale, will be scheduled. Typically the first mortgage will be the only bidder at that auction. After the Sheriff Sale there is a legally-required redemption period of six months. During that time the owner is allowed to stay in the house and try to pay the Bank the full amount owed plus fees. At the end of the redemption period the property returns to the bank. They take it into inventory and usually try to sell it to offset their losses.
Buying a foreclosure can be a frustrating process. Here are a few of the things that have to be considered in buying a foreclosed home:
- Properties are usually winterized and the de-winterization for inspection is commonly at your expense.
- Properties are sold “as-is” with no bank guarantees on condition.
- The bank pays off liens, but water bills and other City fees may not be paid up to date.
- It can take up to 10 days to get a signed purchase agreement back.
- Multiple offers and delayed response times are common.
- Some banks have restrictions on investor offers.
A short sale can occur when an owner is not making payments on time and the property is heading to foreclosure. Many banks are willing to work with the owner to sell the home for less than what is owed before it goes to foreclosure. The idea is that the bank(s) will lose less money than they would by foreclosing. Of course the bank(s) want say in the matter so all purchase agreements between buyer and seller will be “subject to third party approval.” Short sales can be a complicated process. Here are a few considerations.
- How many mortgages and other liens are there on the property? All parties have to agree to release liens to complete the sale.
- How far into the foreclosure process are they. The short sale must close before the end of the redemption period.
- It takes a minimum of 60-90 days to get a short sale approval. During this time you are tied up in the process and can’t offer on other homes.
- Closing is expected 30 days after bank approval.
- Some sellers and banks may require deposit of earnest money and inspection be done before bank approval is received.
Don’t be afraid of Short Sales and Foreclosures. You can often get a better price on a home if you are willing to deal with the inconvenience.
To see a list of currently active foreclosure and short sale listings click here.