“Short sales” are those in which the sellers owe more against their home (including selling costs) than they can sell their home for. (They are ‘short” of funds.)  In rare instances, the seller may have enough money from other sources to bring to the closing to make up the deficit.  In most instances, however, a seller will have to negotiate with their lender (after receiving an offer to purchase) and convince the lender to take less than what is currently owed against the home in order for a sale to proceed.

Bank-owned properties are typically those that have already gone through the foreclosure process and are literally owned by a lender.

The good news:  Short sales and bank-owned properties can be incredibly good values for some buyers!

The bad news:  There are substantial risks involved.  They are not for all buyers for these and other reasons:

o       Most homes are sold “as is”, and the true condition of the home may not be known ahead of time.

o       The time required to get acceptance of an offer may be quite long (often months!).

o       There are often multiple offers on the same property.

o       In many instances, an offer to purchase may not be considered if it contains any contingencies (home inspection, attorney approval, financing, etc.)

o       The actual purchase contract may get re-negotiated at the time of closing, or it may be determined that there isn’t going to be a closing.

Bottom line:  If a potential buyer understands and accepts the risks, he or she may be able to buy a home at a very good price!

To search short sales on this site:  Click on Search all Chicagoland listings, and check the short sale box when entering your search parameters.

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