I thought this was a great article for people looking to buy a home in the Tampa Bay Housing Market. Many clients that are purchasing homes now always ask me what the difference is between a bank owned and short sale property. This news article is the short version as there are many details involved in the process that are not explained here. Bank owned homes and condos are the best way to get a rock bottom price. There are also many other advantages. If you need to close quickly a bank can usually close within 30 days. Short sale houses may take up to 45 days to hear from the bank whether or not your offer has been accepted. Basically, there are so many distressed properties on the market, the banks can’t keep up with the demand. Once the bank actually owns a home or condo they are more motivated to get rid of it. Also, bank owned properties are being reduced in price in average every 30 days if they are not getting offers.
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Article by Tampabay.com
What percentage of today’s home sales in the Tampa Bay area are distressed sales? By distressed, we mean properties owned by the bank or being sold for less than mortgage value by delinquent homeowners.
You might be surprised by September’s numbers: About a third of Hillsborough County’s home sales are either bank sales or short sales. In Pinellas it’s 22 percent, in Pasco 29 percent.
Realtors didn’t start fully classifying properties as distressed until this summer, when the tug of the foreclosure-heavy real estate market became too strong to ignore.
How terrible is the tug? According to Tampa real estate consultant Home Encounter, banked-owned properties in September sold for only 62 percent of what nondistressed properties sold for.
Short sales — selling homes for less than their outstanding mortgages — collected higher prices. But they still earned less than properties sold through normal channels.
Distressed sales help explain the duration of the housing slump. More than 600 such properties were sold in the bay area in September alone. It helps explain why a typical house that fetched $215,000 a year ago now goes for about $170,000.
Distressed sales might also help us project a housing recovery. In Pasco County, based on September sales, the price difference between short sales and normal sales was narrow. That suggests Pasco’s prices can’t fall much more.
The gap was wider in Pinellas and Hillsborough counties. In Pinellas, short sales earned 87 percent of the price of regular sales. In Hillsborough, it was 84 percent. That indicates homeowners haven’t felt the full drag from distressed properties.