It’s a Buyer’s Market
Everyone knows itâ€™s a buyerâ€™s market. So in this buyerâ€™s market you need to understand there are several types of sellers. When you know the type of sellers and what they can and cannot do it will help you find the best deal for you.
Homeowner Selling His Home
The first seller is the homeowner. They want to sell their home and move and they would like a fair price for their home. They are not desperate in a financial sense to sell. They will generally work with buyer as best they can. These sellers have typically owned their home for some time and have equity in the property. Most sellers are willing to negotiate however this seller will likely not have as much price flexibility as some others.
Homeowner with Upside Down Mortgage
The second seller is the homeowner that needs to do a short sale. This seller wants to sell their home; however, what they can sell the house for will not cover the mortgage owed to the lender/mortgage holder. In most cases these homeowners bought their home at the top of the market and have not owned the home for a long time. Therefore, the loan is upside down. The lender/mortgage holder must agree to accept a shortfall on the mortgage, thus a short sale. In some cases the lender/mortgage holder will take 60 to 90 days to respond and agree to the sale. The lender/mortgage holder will compare the contract price with market value for the home.
Bank Owned Homes
The third seller is a third-party sale. Several years ago third-party sales were corporate buy-outs for employees transferred. Today these are foreclosure properties primarily. These homes are offered by a variety of sourcesâ€¦banks, Fannie Mae, Freddie Mac and so forth. These houses can sometimes be in good shape or might perhaps need total renovation. Pricing will be determined by the condition of the house; generally, the lower the price, the more work that will need to be done to the property. Foreclosure homes are almost always sold “as is” – problems and all. Homes in good condition will often be priced near fair market value. These homes tend to turn over quickly and often there are multiple offers. The advantage to foreclosure properties is the price.
What Makes the Best Deal?
To decide what the best deal is, it is best to recognize it may be more than low price. Is it a home that is move in ready, a house that needs a few repairs or updating, or a place that will take renovation? How much cash do you have to work with â€“ do you have enough for down payment and renovations? Are you handy and have experience (and the time) to do repairs and renovations? All these factors determine what the best is for you.