As many of you have read in the local paper and seen on the news, there is a ‘short short and bank owned’ real estate phenomenium across the country. The city of Danbury is not immune from this national problem, but the problem is the area is not as far fledged as others in the country. First let me see explain the difference between the two different types of sales.
A short sale is when a bank agrees to discount the loan balance because of an economic hardship for the borrower. The seller put together papers for the bank and were filled out appropriately for the bank to approve it. For the bank to have approved the short sale, they would have the seller sell the house for less than what you owe on the mortgage. The seller would then turn over the proceeds of the sale to the bank in full satisfaction of the debt. The bank would have to approve or disapprove the sale. Banks will choose to do one if they think it will be a smaller loss for them other than foreclosing.
Bank owned properties (REOS) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. A good amount of foreclose auctions don’t even amount to getting any bids. If there was enough equity in the property to satisfy the loan, the owner would have probably sold the property and paid off the bank. After the unsuccessful auction, the bank does now own the property and handled the eviction process and might do some repairs. The bank will negotiate with the IRS for the removal of tax liens and pay off any HOA dues. Banks do want get get the best price possible and have no interest in ‘dumping’ the real estate they know on cheaply. The properties are generally sold ‘As-Is’ and buyers should do their homework on seeing if the price you would pay (if successful) is comparable to to other homes in the area and should consider the cost of any renovations and time to complete them.
There are currently a fair amount of short sale and bank owned property in Danbury. The information below does come from the CMLS (per 3/3/08).
-Of the 247 single family homes for sale in Danbury, 20 of them are short sales or bank owned. The average market time is 99 days with the average list price of $274,925 compared to the average list price for a single family home in Danbury of $466,588.
-Of the 250 condos or townhomes for sale in Danbury, 22 are short sales or bank owned. The average market time is 73 days with the average list price of $210,700 compared to the average list price for a condo or townhome is $297,032.
-Of the 88 multifamily homes currently for sale in Danbury, 13 are short sales or bank owned. The average market time is 102 days with the average list price of $303,238. The average list price for a multifamily or income property in Danbury is $443,951.
This short sales and bank owned properties present great opportunites for first time buyers & investors looking for real estate in the Danbury,CT area.