If you are looking to buy a home in Colorado Springs, chances are you going to run across bank owned, real estate owned, and short sale properties. Wondering what the difference is between these types of properties? Take a look below…
Short Sale- If a property is listed as a short sale, the owner is selling the home for less than what is owed on their mortgage payment. A short sale is considered a pre-foreclosure.
If you submit an offer on a short sale property in Colorado Springs, it will be subject to the bank’s approval. One drawback when submitting an offer on a short sale property is the waiting period. The buyer may have to wait up to a month or more before they hear anything back from the bank. Also, the bank may not approve the short sale.
The waiting period may be shorter if the listing agent has already started the ball rolling with the bank and has the necessary documentation ready for submitting once an offer is received.
If you are going to submit an offer on a short sale, be patient and
understand short sales may take longer to purchase than other homes in Colorado Springs.
Bank Owned- A bank owned property is a home that has already gone through foreclosure, was not purchased as foreclosure auction through the El Paso County Public Trustee, and is now back in the bank’s possession. These properties are normally vacant and often winterized (water turned off). Bank owned properties usually close as quickly as other types of properties but it often depends on the bank. Once you submit an offer for a bank owned property, the bank will often receive competing offers and make a decision.
Once you agree on a purchase price with the bank, they will require the buyer sign an addendum to the contract you submitted with your Colorado Springs Realtor®. For example, if you want to have 3 weeks in order to obtain a home
inspection for the property, the bank may only allow the buyer 5-7 days to have the home inspected. The bank usually indicates that the inspection is for informational purposes of the buyer only and the home is Sold as Is and no repairs will be made by the bank for the purchaser. Every bank is different so it is important the buyer carefully review
the addenda with their real estate agent or an attorney carefully before agreeing to its terms. Additionally, if the property is winterized, it is solely at the buyer’s expense to de-winterize and re-winterize the property for inspection.
Bank owned properties can usually be purchased below market value for an area but often need some work as well.
Colorado Springs Realtor Patricia Beck, providing real estate services to home buyers and sellers.