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TAKING ADVANTAGE OF A BUYER’S MARKET
Today’s market is very difficult for sellers, yet offers incredible bargains for savvy buyers. Look at a cross section of homes for sale in virtually any subdivision and most likely you will see an equally broad cross section of asking prices reflecting different financial circumstances and motivations of individual sellers.
Example property data links below last updated: FRIDAY - MARCH 12, 2010
FORECLOSURE SALES - (Click Here)
The best buyer opportunities are usually offered by bank-owned properties (foreclosure sales). Main characteristics of foreclosure sales are:
Asking prices are rock bottom compared to “non-distress” listings in the same subdivision with a possible opportunity to negotiate a further reduction from the bank selling the property.
Foreclosure homes can require substantial renovation after closing though this is not always the case. When considering a foreclosure, always factor in the cost of bringing a home back to its former glory, if applicable.
Foreclosure sales are almost invariably “As-Is”. Buyers have the opportunity to perform home inspections and can be released from the purchase contract if significant issues are identified. The seller is not required to make repairs.
Foreclosure homes are usually offered unfurnished. However, once again, there are exceptions, especially in the resort areas where foreclosed vacation homes in move-in condition are sometimes available.
Getting a response to an offer is not normally an issue. The bank will usually respond within a few days and negotiations can be concluded relatively quickly. Once agreement is reached, the bank will require the buyer to complete inspections, arrange financing (if necessary) and close as soon as possible.
SHORT SALES - (Cick Here)
This type of “distress sale” occurs when a seller is either in default on their mortgage and/or there are insufficient proceeds from the sale to cover the closing costs, including the mortgage payoff. It is the stage prior to foreclosure where the seller is attempting to persuade the mortgage company to accept a reduced payoff rather than incur greater losses via the foreclosure process. The main characteristics of a short sale are:
Asking prices are much lower compared to “non-distress” listings in the same subdivision.
Property condition and “As-Is” requirements are similar to foreclosure sales.
Seller’s mortgage company effectively becomes a party to the purchase contract. Their approval of all contractual terms is required in order to consummate the sale.
Seller’s mortgage company will not normally confirm whether or not they will approve a short sale until a purchase offer is received. Securing an initial response to the purchase offer can take a long time. Typically this can be a minimum of 30 days and often much longer. The mortgage company may even choose, after a lengthy wait, not to respond to buyer’s offer at all.
Even though a home is offered as a short sale, not all sellers will qualify with their lenders for a short sale settlement. So, even though the terms of buyer’s offer might be otherwise acceptable to seller’s mortgage company, the seller’s financial situation may disqualify them from a short sale.
The short sale process can result in a good bargain for the buyer, yet the process can take many months with no guarantee of successfully agreeing terms with seller and the third-party lender. For this reason alone, many buyers avoid short sales in favor of foreclosure sales.
REGULAR NON-DISTRESS SALES - (Click Here)
It is fair to say that the nicest homes in best condition with great locations are usually offered by owners who are not in financial difficulties. While these generally can be somewhat more expensive than their distress sale counterparts, regular sale listings can be found once in awhile that compare favorably on price. Plus, there is the added advantage of dealing directly with the home owner rather than a bank or mortgage company.
These are examples of current well positioned homes in the Disney World area.
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