Here in Chicago, in many neighborhoods and Suburban Chicago Communities, buyers are king! Especially those with lotsa cash, or stellar credit.
And what are these buyers looking for, gang!
BARGAINS, of course! They want to save a lot of money. In our clients' recent jargon, "I wanna steal da joint!" (Remember, this is Chicago after all - many still talk this way!)
So, many call our Chicago Real Estate Team, asking for a list of Short Sale Properties - those properties where the owners are selling for less than they owe on their mortgage. Problem here, most of the time, the bank takes their sweet time to consider and approve these sales. And, more often than not, they are disapproved!
Some bargain hunters head to the Cook County Chancery Court, and try to pick up a bargain at the Sheriff's Sale. Often times, potential buyers bid too little, and the bank representative outbids them to revert the property to the lending bank.
A higher percentage of success?
Properties that have already reverted to bank ownership - completed foreclosures, known in the business as REO's, for Real Estate Owned by banks - might offer a greater chance of closure, however.
As reported by Patricia Mertz Esswein of Kipplinger News, as syndicated in the Chicago Tribune, lenders are quite anxious to unload REO Properties they acquire, and price them very low to attract a quick buyer. Often, however, many bank-owned REO Properties sell in multiple offers, at higher than asking price.
Further, some bank-owned properties are in above-average condition - we at Dean's Team Chicago just sold a two-bedroom ranch home in the Norwood Park Neighborhood on the Northwest Side of Chicago in which the bank remodeled the kitchen and baths, upgraded the plumbing and electrical systems, and freshly painted the home to generate peak interest. Our buyer purchased at a sizable discount, and was able to close quickly.
In contrast, many of the short sale properties our Chicago Real Estate Team has put under contract recently have taken up to one year to close, with considerable back-and-forth negotiation with the bank. Often, the seller pays a higher price than originally offered, and the closing date is unpredictable. In several cases, the short-sale lenders have ultimately rejected good offers, at a fair price, after a protracted negotiation. Buyers get frustrated and walk away, and the distressed seller often ends up in foreclosure.
A national compiler of Foreclosure and Pre-Foreclosure Data, RealtyTrac.com, estimates that lenders presently hold over 950,000 REO Properties, but that less than a third are presently on the market. Lenders continue to hold back some REO supply, rather than dump hundreds of foreclosures on local real estate markets already struggling to rebound.
On the flip side, for bargain-seeking investors, the REO backlog suggests an ample supply of low-priced real estate will continue to flow to market for months to come.
Please see our post today via BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO