California and the entire country is in an interesting real estate market right now. Tustin home prices and prices across Orange County have significantly dropped, which creates "distressed sellers" and new rules when it comes to buying and selling Tustin real estate.We wanted to take a moment to define the difference between an equity seller, a short sale, and a foreclosure property. This way you as a buyer have a better understanding of the emotions and reality behind that Tustin home for sale you're considering!
First off, we have a "normal" or "equity" sale. This means the owner of the property has a mortgage on the home for less than the property is actually worth. The difference between the amount mortgaged and the amount the property is worth is called "Equity". Equity is a good thing; because you can do a normal, traditional California real estate transaction between buyer and seller.
Tustin Short Sales
Short sales are also a factor in our current market. What is a short sale? Well, its best described as a property where the owner wants or needs to sell the home, but they unfortunately have a mortgage on the property for more than the property's current market value. Home prices historically go up and go down, and in a short sale, the owner is in a down market but needs to sell their home.
Tustin short sales and all short sales are complicated to deal with, so you'll want to use a professional Realtor who has experience with the process. If you're buying a short sale, the bank is also a decision maker in the transaction. What does that mean? Well, it means waiting for a response on your offer, and negotiations with seller AND bank. In essence, the agent representing the short sale seller must convince the bank to sell that property at a price less than the owner bought the property for, so the bank and the owner are both losing money. In addition, the bank may have their own opinion on what the property is worth, so the price you offer at may not necessarily be the price you end up paying.
Many times, short sale owners do not want to leave their property, but due to job or medical factors, they can no longer make payments and they need to downsize. This makes dealing with short sales an emotional process, and its another reason why its so important to have a professional Tustin Realtor like Bob O'Brien to help you stay focused on the homebuying task at hand.
Tustin Foreclosures
The last type of property you'll find in the current Tustin real estate market is a "foreclosure", or bank owned "REO". REO simply stands for Real Estate Owned by the bank. Tustin REO properties sell FAST, because many times the bank will price the property BELOW market value to sell it quickly. Sometimes a short sale property does not sell, and the owner is late on payments, so the property gets foreclosed on and becomes official property of the bank.
Buying a Tustin foreclosure isn't an easy process, though. You'll need to battle with all cash investors, multiple offers, and also be prepared to deal with the bank's paperwork; NOT the typical paperwork and transaction designed by California Association of Realtors. This scares away certain buyers, but if done with the right professional and research, you can get a GREAT DEAL purchasing a foreclosed home!
The strategy and process of purchasing an equity sale, short sale, or Tustin foreclosure varies greatly, so make sure to call us 714-504-0230 to avoid costly mistakes and heartbreaks!
Bob O'Brien
714-504-0230
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