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Foreclosures and Short Sales – Just The Basics Please

Posted on Wednesday, November 09, 2011

This past week one of our Naples real estate clients asked us about short sales and foreclosures – particularly if an auction process was required.  This morning we will take a brief look at foreclosures and short sales – just the basics –  and try to provide a straight forward and simple explanation of these two different real estate processes.  If you have more questions just contact us at

Short sales and foreclosures do not have auctions automatically – for example in a foreclosure, if there are multiple offers, the selling agent typically asks for best and final offers from all parties and submits all offers to the bank. The bank responds within several days. The important point here is in this foreclosure process you should know whether your offer was accepted in a few days.

A short sale is a little different.  In a short sale there is only one offer at a time and two parties, the owner and the bank, are going to have to decide about your offer.  Here is how it works –  you negotiate with the owner and selling agent.  Once the owner likes the offer then your offer is submitted to the bank.  Unlike a foreclosure there are typically no other offers under consideration at the bank.  Like foreclosures, short sales do not necessarily require an auction.

It may take the bank 60-90 days to respond to your short sale offer, this is where some wait time on your part may be required. The bank typically says either yes to or gives you a counter offer. Then you can accept  or reject their counter offer. If you accept, closing can occur within 30 days. If you reject, you are back to square one looking for a property.

The main reason for the delay in the short sale process is the bank is typically not set up for negotiations.  Banks are in the business of lending money historically and only recently have found themselves in the real estate negotiating process at large volume. Also within the bank it may be the case a committee decision is required to accept or counter a short sale offer as opposed to one bank employee making the call.  This committee may be looking at multiple short sale properties – not just yours –  and trying to decide and balance which offers to take as a collective group.  As these challenging times have dragged on the banks have adapted and gained more practice in the process, improved their decision-making speed and they are better at negotiating in our view, but be prepared for time delays.

These are the basics of real estate short sales and foreclosures.  Many good opportunities may be found here and if you take the time to learn the process and work though the differences.  Let us know if you have more questions or would like to add to these thoughts – and have a great day today.


No legal advice or suggestions are being given in this Blog and the writing of this Blog are intended for the sole use of our clients.

Mark Goebel, PA is a REALTOR with Coldwell Banker on 5th avenue in Naples, Florida with 35+ years of visiting and living in Naples.  After 25 years at Accenture, Mark retired as a managing director and spends his time helping non profits and building a Naples real estate team with his wife Nan.  Talk to Mark and Nan about life in Naples and why they chose Naples, Florida to live full-time over all others.

Mark Goebel, PA


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