Today’s real estate market offers many different opportunities for the homebuyer. Not all are a fit for every buyer. Here’s what you need to know:
- Foreclosures/REO/Bank-owned properties. – This represents a significant percentage of the homes available to you in Central Florida and is what everyone is talking about! These are properties now owned by banks and lending institutions after the homeowner lost them in foreclosure and are typically priced below market value and available to close in 30-45 days. Because these features are so attractive, it is common for these properties to receive multiple offers within days of being listed…and to sell over asking price. If you choose to purchase a foreclosure, expect to buy it in “AS-IS” condition (with right to inspect). Most banks will consider contributing toward your closing costs with the properly structured offer. Some banks will require that you get pre-qualified with their preferred lender (although you are not required to close with that lender). Upon acceptance the bank will issue an addendum confirming the terms of the sale.
- Short Sales. – Short sales are the most common type of property offered in our market…and the one with the worst reputation! Short Sales are homes offered for sale at a market price which is less than the homeowner owes to the bank. This sale results in a “shortage” to the bank which must be negotiated and approved by the mortgage holder and any other third parties who may have lien-holder interest in the property (such as second mortgages, mortgage insurance companies, home equity creditors, homeowner associations, etc) before an offer for sale can be accepted. The length of time for this varies from 30 days to as much as 6 months or more in extreme situations. Typical negotiation time is 2-4 months and varies by which bank is primary and by the number of parties involved. Do not rule out short sales…make sure you have an experienced and skilled realtor who can navigate this “messy” part of the market to identify any properties that may be a great opportunity for YOU. If you cannot leverage your financing to compete in multiple offer situations, you may find that leveraging your time will get you the deal you are looking for.
- Traditional Equity Sales. - Traditional sales are properties for sale where the homeowner has enough equity to sell the home for current market pricing and pay off any existing mortgages on the home. While rarer, these still do exist! With traditional sales, sellers are typically willing to do any needed repairs, as indicated by a licensed home inspector. Closing can usually occur within 30-45 days.
- Builder Sales. – Builders often have homes in inventory or under construction that are available to purchase. They will also offer “to-be-built” homes. Incentives such as upgrades or closing costs are frequently advertised to attract buyers. If you are considering buying a home from a builder, be sure to let your REALTOR® know FIRST. Please know this: Builders represent THEMSELVES. They do not EVER represent you. When you have a skilled agent representing you, you will know the how terms of the builder’s contract affect you, you will be able to assert additional protections when necessary, and you will almost always be able to negotiate more in the deal. Builders do deal fairly, but don’t you deserve more? You deserve your own representation. Make sure you get it.
- For Sale By Owner sales. – These sales are not very common any more as real estate transactions have become more complicated and pricing properties to sell has become more challenging. If you see a home that interests you and is “for sale by owner”, please allow your agent to contact them directly. Most “for sale by owners” will work with a buyer’s agent and your agent will be in a better position to negotiate on your behalf.
