Can you really get a house super cheap in a Short Sale or a Bank Owned Home in Portland, OR? What is the Difference?

Sometimes you can- it all depends on where the bank is in the foreclosure process- how badly they want to get rid of it, and how many other people want to buy the same house.

When you are in the inner city- either the west side, east side or even North Portland- there are alot of people who are trying to buy close in. So when a really good deal comes up- there are usually multiple offers! We've had some transactions just in the past 2 weeks where we made offers on houses in Portland- and there were 10 other offers on one, and 12 on another. This is not unusual! We have several Short Sales as our own listings- and anything in the City has gotten multiple offers- sometimes being bid up $30,000-$40,000! The bank takes up to four months on a Short Sale, so there is lots of time for other offers to come in.

On a Bank owned home it's a little different. The bank usually knows how much they want - and if they get that offer, they will accept it quickly. They have already been through the short sales process, and just want the house gone! Each bank is different in the way they handle it, too. Some will credit for repairs- some won't. If the house is in a hot close in area, it will probably get multiple offers, although your realtor....if they are good....can keep checking, and up your offer to keep you at the top! That's what I try to do for my clients!

The outlying areas- especially Beaverton, Aloha, Hillsboro, Oregon City, Canby, and farther out- have a harder time selling. There aren't as many people looking in those areas- so I've seen people get unbelievable deals! My last buyer just got his house for $132,000- on a quarter acre private beautiful lot-that sold for $230000 in 2007! It was a bank owned home- but no one seemed to want it! I have another buyer whose offer of $250000 on a house that started at $394000, is very close to being accepted...there are no other offers and the Short Sale is at the very end.....so the bank is getting desperate!

Sometimes, though, when the bank does their BPO- which means Broker Price Opinion-(They pay a neighborhood Specialist to do a Market Analysis on the house so they will have a good idea as to what it is worth), the BPO comes out higher than what the bank can get- some banks will go ahead and let it go at a low price- other banks hold on to it until they get close to the appraised value. You never know until you make an offer. Many times the realtor doesn't even have any idea of what the bank will take.

Banks are so overwhelmed by the number of Short Sales and Foreclosures they are dealing with, they don't even look at the offers until it gets near to the dead line for the foreclosure to take affect, Here is an example of how it goes:

We had a listing in NE Portland for $230000- we got 6 offers in January, each one higher than the last....bidding it up $300000! You would think the bank would jump on it and take the high offer! Did they? No! They said they were getting up to 5000 new short sales a week- and all they could do was get to the ones that were on the verge of forelcosure- and leave the rest until the last minute. It is like they are drowning in Short Sales- and if they don't handle the ones ready to foreclose right now- they will lose them....so they put every other house on hold until they are ready to foreclose!

So they didn't even look at any of the offers we sent in until 4 days before the auction date....which was the end of March! When they finally did look at them, they saw that a new lien had been tacked on- so they refused to look at the offers- We hustled and got the lien off within 24 hours- the day before the Auction Date- and held our breath. The bank gave an extension- and it finally closed a month later!!!

This is a typical example of how Short Sales go! If we wouldn't have been on top of it- and gotten the lien off, and gotten all the paperwork back to the bank in time- it would have just foreclosed and become a Bank Owned home or been auctioned off!