Wednesday, May 21, 2008

We Hear So Much About Being Able To Make A Good Buy Now … How Do We Get One?

What a wonderful yet frustrating time to be a Buyer! There are more properties for sale than there are Buyers. Buyers are being inundated with information and much of it is conflicting. The result is a sense of confusion and frustration among Buyers … “buy now”… but “the market might go lower” …”you should get concessions when you buy”, but there are no guidelines. There are basically four types of properties today: bank owned, foreclosure, preforeclosure/short sale, and owner.

Many homes are being or have been foreclosed on. Buyers are told that this is a good opportunity for making a good buy. Is it? It can be, and, for some, it will be, but for most it will only cause them to become paralyzed with inaction and potentially miss the entire 2008 market of opportunity. Foreclosure opportunities are often misunderstood by Buyers.

A “bank-owned” property is one that has been foreclosed on by the lender, and is commonly referred to as a “REO”, real estate owned. The banks have been reducing their prices enticingly on their REOs, but it can be difficult to make a deal with them. Some wait weeks to respond to your offer while they “shop” your offer – see if they can get a better one from another Buyer. All require that an extensive set of documents be signed by the Buyer which diminish or remove many of the Buyer’s “normal” rights. Some of these are in direct conflict with Nevada consumer protection law. Want a good deal? It had better be a great one and you should know what you are doing as you venture down this path. The results can be rewarding, but we suggest that you have a good Realtor as a guide, have patience, be ready for surprises and frustration, and make sure the goal is a worthy one – the right property at an exceptional price!

A foreclosure property is one that is being sold at the court house steps for lack of payment. Historically these have been a good deal. This can be a good way to buy property if you have the cash to do so, but the reality is that today most foreclosures occur because the Owner is “upside down”, they owe more than they are worth – 30-40% in most cases.

A preforeclosure property is one that is coming up for foreclosure sale – a NOD (Notice of Default) has been filed and it will be sold approximately 120 days thereafter. This is where the opportunity for a short sale comes in if the Owner owes more than what the property is worth. This process can be rewarding if the lender circumstances are right. The Buyer’s risk is less than that of a foreclosure, but the transaction hassle is more than that of a foreclosed property. This, too, takes time and is full of uncertainty. They can be accomplished … with a seasoned agent to guide and advise you.

Surprisingly, some of the best opportunities out there are owners that aren’t upside down, aren’t desperate, have taken care of their property, and are just wanting and willing to move on. They make quick decisions – you won’t have to wait weeks for a maybe answer; the property is in good shape – you won’t have a dead lawn; they will disclose any defects they know about – you don’t have to sign away rights and hope for the best comforted only by your “price victory”. Buying from a motivated owner usually means there are fewer repairs for you to make, a shorter transaction time, no stigmatization of the property, etc. Make an offer to an owner…you might be delightfully surprised, and financially and emotionally rewarded.

Our Advice: It all depends on what your definition of a “good buy” is. Do you want a cheap price or a good value? Talk your situation over with your agent…candidly. Are you willing to deal with the bank’s strong arm tactics and delays to buy a bank owned property? Do you have the cash and patience for a foreclosure sale? Do you have the patience for the hassle and uncertainty of a short sale? Today’s motivated Seller is competing with the foreclosures and short sales…and they know it. You might pay a little bit more for an “Owner Home”, but you well could be ahead when all is said and done. Pick a path and take action.

A perceived “good buy” will vary according to the Buyer. Make a good buy for you and your family according to your goals, objectives, emotions and circumstances. Your happiness is all that matters, and you can make yourself happy in this market! Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, or , 775-781-5472.

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