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Gordon Pass Naples FL

Naples Foreclosures and Short Sales

After the easy bank credit lending practices that lead to the housing price spike in 2005, foreclosures started to appear after the the bubble burst. Foreclosures and short sales were once a significant portion of the Naples home sales.

Now foreclosures and short sales represent an insignificant percent of the areas sales. The few that come to market mostly were purchase during the housing bubble and still have mortgage balances higher than the homes value.

Naples Foreclosed Homes by Year

Foreclosures

  • Foreclosed homes are sold AS IS with the right to inspect. They are usually in disrepair, and need a lot of work.
  • If a Naples foreclosure does not sell immediately, the price will gradually be reduced over time until it sells. 
  • It is very common for foreclosures to receive multiple offers from investors. In which case the bank will ask for “Final and Best” offer from all interested parties.
  • The bank will require multiple addendums to the Naples area standard purchase agreement, or replace it all together with their own version.

Short Sales

While once common after the housing bubble, short sales represent a tiny portion of area homes sales. Short sales are properties where the homes value is less than the mortgage on the home. A short sale results when a lender agrees to accept less than what is owed when a home is sold. The lender is coming up “short” of the total amount owed to them.

The list price for a short sale is meaningless, the owner will accept any offer. They need an offer to start the process with their lender, who must agree to accept an amount less that what is owed to them.

When the seller submits an offer to the lender, there is no guarantee the lender will participate. The lender may reject the seller as a candidate and/or reject the offer. This process can expect to take many months before a response is received from the lender.

The seller needs to accept an offer from a buyer to start the process with the bank. The offer is then sent to the bank, along with a packet from the seller on their financial situation.

  • If the lender participates, they will only accept a market value offer, which is most likely higher than the listed price.
  • The list price is meaningless. Short sales are often listed lower than the real value. This is done in order to entice a buyer to submit an offer that is doomed to fail. A seller needs an offer to begin the process with the bank – any offer.
  • The bank might be okay with the offered price, but could reject the seller as not qualifying for a short sale.
  • As for the lender, they are proceeding simultaneously with foreclosure steps.
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