Short Sales and lender-owned properties are leading the real estate news across the country, where in many communities the majority of homes sold are in these categories. Fortunately, they aren’t leading the news in the Bryan / College Station area. According to RealtyTrac, the leading online marketplace for foreclosure properties, our area saw only 167 foreclosures in 2009 – only nineteen hundredths of one percent of all homes went into foreclosure.

When you compare that to the nation-wide figure of 2.21% of all homes, it’s clear that our part of the world has been the calm in the eye of the storm these past few years. Instead of tumbling values led by foreclosures, homes here have steadily increased in value.

Even while foreclosures and short sales don’t dominate our market, there are a few, and there are some things to know before you become involved.

1. Lender-Owned Homes

Otherwise known as REO’s or “repos” these homes have been repossessed by the lender and are offered for sale in an “as-is” condition.

That means that while you will have the opportunity to hire an inspector and have the houses checked for structural, plumbing, and electrical problems, there will be no disclosure from the seller. Depending upon the lender, the power and water may or may not be turned on for inspection purposes, so their condition could still remain unknown, even after an inspection.

Lender-owned homes may be in considerable disrepair – either from damage done by homeowners who were angry when they left, or from vandalism after the house was vacated. Some have water damage and the possibility of mold because they were improperly winterized – or not winterized – causing leaks.

In most cases, lender-owned homes will need extensive cleaning and possibly new paint and carpeting. You won’t have the opportunity to learn anything about the home from its previous occupants, so you need to be prepared for a surprise or two.

The good news is that lender-owned properties may be priced far below comparable homes in the market, because the banks want these properties off their books. In areas of the country where REO’s make up a large part of the listing inventory, they’re leading the price decline by selling for less than half the price per square foot of consumer owned homes.

Before shopping for a REO home, be sure your own financing is in place. The banks that own these homes want to see cash or a commitment letter showing that you have the ability to buy.

Your agent at Connective Realty, LLC has a list of REO properties available through the Bryan / College Station MLS and will be happy to share the information and arrange showings of those that interest you.

2. Short Sales

Because prices here in Bryan / College Station have not fallen, few homeowners will find themselves in the “upside down” position experienced by others in the U.S.

Buyers should know that short sale homes will not be the bargain that REO’s are – but they carry much less risk. The homeowner will have filled out the standard disclosure forms, and in most cases the homeowner is still available to answer questions about everything from the location of a septic tank to how the in-ground sprinkler system operates.

Also, in almost every case, a short sale home will be in better condition than a lender-owned home.

The down side to purchasing a short sale is the length of time required to close. Banks are not in a hurry, so it could take months before you can close and move in to your new home.

Sellers who do owe more than their home is worth in today’s marketplace need to take care in choosing a real estate professional to assist in selling. They need an agent who understands the “Three P’s” of getting a short sale closed ahead of foreclosure.

Those “Three P’s“:

  • Price
  • Paperwork
  • Persistence

The price must be a perfect balance between current market values and what the lender will accept as a payoff.

Gathering the necessary paperwork for approval of a short sale is the homeowner’s responsibility, but a Connective Realty, LLC agent can explain what is required and how to present it.

Next, the agent will gather paperwork from the buyers to assure the seller’s bank that the new buyers can indeed close when the sale is approved.

An agent’s negotiation skills now come in to play – because it’s important that the lender gives written assurance that the homeowner/seller will not be held responsible for the deficiency between what they owe and what they receive from the short sale.

If you are selling short, this bit of paperwork is vital to your future well-being.

Persistence is another balancing act. If an agent simply submits the paperwork and waits, the house could go into foreclosure long before the short sale is approved. On the other hand, an agent who is overly persistent can annoy the bank’s representatives and get the transaction moved to the bottom of the stack. The bottom line is that short sales require considerable skill and dedication from the real estate agents involved.

If you are considering a short sale, give Connective Realty, LLC a call. We’ll be glad to explain the procedure and fill you in on what would be required from you as a seller.


Closing a deal on your new property can be one of the most confusing parts of the buying process. Attached below are pages from a sample HUD-1 Settlement for a new property.


When talking to agents, lenders, and realtors, it’s easy to get lost in the jumble. You can download our definition list for common industry terms and you’ll be talking like a pro in no time!

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