Sacramento Short Sales; The New REO?

Sacramento Short Sale Specialist Reports Sacramento Short Sales Increase!
As the Sacramento area real estate market continues to increase in volume and gain momentum, buyers entering the market for the first time may be in for some surprises. One of the significant changes is the ratio of short sales to bank owned properties, (REO). Why is that? What will it mean to buyer? Before we explore that; let’s make sure we understand the difference…
An REO or bank owned or lender owned transaction occurs when a property is listed by a bank, lender or asset manager AFTER the property has gone through foreclosure. The Listing agent is hired by the bank/lender after the lender has taken possession. A short sale occurs BEFORE foreclosure is completed, the homeowner is still in control. The agent’ sole fiduciary responsibility is to the homeowner.  This transaction has two sides to it; real estate and involves the lender allowing the borrower/owner to sell their property but net the lender less than they are owed. In successful short sales, the property owner gets to walk away from the property freed of the excessive debt, and the lender, in exchange for accepting less than they were owed, avoids the expense of implementing and managing the foreclosure process.
If we characterize all short sales and all  lender owned properties as “distressed”properties, the Tri-County Sacrament area real estate inventory today is over 65%  distressed properties.
So short sales have gone from being just a major pain in the butt to being the lions share of our available inventory, and pain in the butt. They take lots of time, take lots of negotiation and follow-through and are definitely not something you just want to do on ‘the side’.  It seems that in order to keep your sanity, as a listing agent you are either ‘all in’ or not, when it comes to these time and energy sapping monsters…