House Flipping

REO’s vs Short Sales. I ask myself this all the time. The answer is go for them all. However the differences are not as apparent as ithey may seem. There are pros and cons to both.

While REO’s are almost straight forward there may still be the auction or bidding factor. Just because the home is listed for sale, doesn’t mean you can just submit an offer and you have a contract. This may be true a lot of times, but more often than not the banks will stall and hold an in-house auction or bidding war. This gets frustrating. Although I have found a few Realtors that provide a first come first serve service. These are the Realtor to follow.

Short-Sales are even more frustrating. First you may encounter a bidding war and then you have to wait for all those in the higher chain of command make final approval.

The big argument is which is a better deal or which way would I get the same home for less. I have argued this with many investors and have have yet to come to a confirmed agreement. My answer is I don’t care.

Making short sales offers is like planting seeds. Make a few offers and than later down the road you may have a nice crop to harvest. While making offers on REO’s has quicker results and may be done on the fly. The best sollution is to bid both accordingly and take into consideration the value of the home of a short sale may be less when you finally purchase. And don’t forget to make sure you can make good on you offer to purchase. You don’t want to make an offer on a short sale; then go and buy up a bunch of REO’s, leaving yourself with no capitol to actually purchase the short sale when the time comes.

The truth is, investing in short sales might be a Big Boys game and not for the novice investor with limited cash flow.

2 Responses to “Reos vs Short Sales”