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Tuesday, June 30, 2015

Home Buyer Tips: Does it really matter what type of sale it is?

Many times buyers want to know why a house is on the market.  Buyers believe if they can determine the type of sale (short sale, estate sale, foreclosure, estate sale) it may give them some potential leverage to get a better deal.  In some cases this may be true.

More importantly, a real estate agent should know the type of sale for every property a buyer clients will see let alone make an offer on

A buyer's goals, budget and time line can limit the type of sale they should consider purchasing.

For example, although now less common in Brevard County, a short sale has one often unpredictable characteristic....time.

A short sale occurs when a seller is trying to sell a house for less than the mortgage owed.  However, any sale must be approved by the lender.  The time frame may be a few months or much longer (including never).    If a buyer has a time table that requires a closing within a specified period, a short sale is probably not a good choice.

Read more about short sales here.

Should you consider a short sale?
What is a short sale?
Are you sure you want to look at short sales?

Another time when a buyer needs to be aware of the sale type is when it is a foreclosure.  Foreclosure properties typically have been neglected and are in need of repairs.  Some are missing appliances and other critical items.

The type of loan a purchaser will be using may limit the potential for a foreclosure purchase.

With a foreclosure it is usually more of a condition/appraisal issue rather then time. (think condition more so than time in this case).   Most foreclosures are sold "as is where is" so, unlike a standard sale, the chance of getting required repairs done by the seller is practically impossible.

However, if a buyer is getting an FHA mortgage then there may be options for repairs mortgage many of these are not finance-able.   However this is not always the case.  Discuss the possibility of a foreclosure purchase with your lender first.

One other word about foreclosures - inspections.  Many times the electricity and water will be off.  If the service can be resorted for an inspection it may be an additional buyer cost.

Another type of sale to be aware of - the estate sale.  Some buyers think of estate sales as a bargain opportunity.  This may or may not be the case.  It all depends on the seller (heirs) motivation.

More importantly, with an estate sale, it is important to know if the property has been through probate or if there will be some other potential hold up in closing (i.e. multiple approval parties/multiple locations/etc).   Most often, if a property has already gone through probate or the sale is in a trust following a death, there is no reason to approach the marketing any differently from any other sale.  

So does it really matter what type of sale it is?   Almost always, the answer will be yes.  

Considering buying or selling a Viera, Florida home?  Call me at 321-693-3850 if I can help in any way.

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