Auctions, Foreclosures, Short Sales Auctions, foreclosure sales and short sales currently dominate the real estate market in Nevada. If you search through Greater Las Vegas Association of Realtors (GLVAR) listings via an agent's site (like the IDX site will find that a large portion of the properties being offered are short sales. "Short sales" are properties that have been defaulted, and the underlying mortgage holder or holders have agreed to work with the owner and accept offers that are usually below the mortgage balance. The owner gets the benefit of not having to have a default judgment recorded against them. If the mortgage holder or holders agree to a deal with a new borrower, the owner no longs owes anything to the mortgage holder. As a buyer, you need to understand that a price advertised for a home that is in a "short sale" situation may not have been a price that was agreed to by the underlying mortgage holder. Agents will continue to reduce the price of a short sale property until they get an offer. So a home that is initially offered at $ 200,000 may get reduced to $ 160,000 before someone makes an offer. That doesn't mean that the mortgage hold is willing to accept $ 160,000, so a counter proposal is possible after you have waited a long time for a response. Foreclosure sales are sales that have already gone through the foreclosure process. The properties are often called "REO" or "Real Estate Owned" and the bank or financial institution that took back the property is the actual owner. Since there is a substantial carrying cost associate with holding all real property, banks and other financial institutions are usually very motivated to sell these properties. Since buyers do not have to wait for long periods to find out if a deal is acceptable, as is typical in "short sales," foreclosure sales are often a better situation for a buyer. Auctions work great for items that are in extreme demand, where a number of bidders are fighting for the same sought after item or home. Prices are bid up, and the psychology of the situation is on the side of the seller. The opposite situation is usually the case for home. When no one wants an item, like a home, it is usually seen as a desperation play. People who want an item or a property will sit at an auction and not bid unless they perceive that there are no other bidders. Or they will only bid if they can get an item for 10 cents to 20 cents on the dollar. Since many understand that auctions are the market of last resort, you often find lower quality homes being sold at auction. The "Recession of 2008" has brought us a whole new world in the real estate industry. You may be pre-qualified, have great credit and a great job . . . but that don't mean that you will secure a loan when you need it. Things like FHA property approval and lending requirements that change monthly can turn your slam-dunk purchase into a deal that you cannot afford. Its also important to note that, based on mortgage statistics, it is likely that a whole new round of foreclosures will occur in 2009 that may bring the market down to new depths. Most recognized real property experts are saying that we have another 10% to 20% loss in real property values in many markets before we hit the bottom. That means 2009 could be another very bad year for the mortgage business. Copyright 2008, Glenn J. Rigdon, Horizon Village Realty