What Should a Buyer Expect When Buying in Today’s Real Estate Market?

May 18, 2010 at 9:34 am Leave a comment

By Maria Hass, Realtor

A buyer who is looking to purchase a home in today’s market should expect to either wait on a short sale, play the games of the lenders when bidding on bank-owned properties or pay a little more for a traditional sale or a new construction home.
1. Short Sales – This type of transaction could work for buyers who have the time to wait and are flexible about price changes. Short sales could take anywhere from two to eight months to close. The sale and price are not guaranteed until approved by the lender. This may be frustrating for buyers who waited a long time for a house only to find out that the seller’s lender wants an additional $10,000 or more from the buyer to close the deal.
2. Lender-owned Properties – This type of transaction usually ends up in multiple bids because the home is listed for way below market value. The lender’s strategy is to hold on to offers and specify 7 to 14 days on the market prior to reviewing the offers. Some lenders go through three rounds of counter offers before deciding on who the lucky “winner” is. First, they counter with highest and best. Buyers come back with a higher offer than before. Then, the lender makes a short list of who to counter to. By doing this, the lender hopes to improve the offer for the second time before finally deciding on the lucky winner. The potential buyer could go through an emotional roller coaster — and could end up frustrated.
3. Traditional Sales – This is the simplest and easiest transaction. The homeowner sells his/her house through a Realtor. No banks are involved. A response to your offer can be received within 24 hours.
4. New Construction Homes – Spec homes are available for occupancy within a certain time frame. The transaction is simple, easy, and the response is fast. Pricing for spec homes is a little higher but you get a brand new home with a warranty and usually can still choose your flooring colors and upgrades to give the home a personal touch.
One thing buyers should realize is that depending on the price range, area and your home’s features, buying a house in today’s market may offer challenges and some waiting time. Having a lot of patience and starting three to five months prior to your desired closing should give you enough time to find a home. At times, a buyer may submit three or four offers (or more) to a distress home prior to finally winning one.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , , , , .

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