Friday, November 16, 2012

Newsletter from Lisa Wetzel and Jim Valentine 1.5.2012
Short Sales And Cash Buyers 

Cash is king and Cash Buyers are often treated like one. There is great buying power when shopping for real estate with cash, but does it apply in a Short Sale situation? The process takes significant time and most Cash Buyers use short time and their ability to close quickly to negotiate a good price. With that gambit taken off the table by the time constraints of a Short Sale does the Cash Buyer get the benefit of their cash position that they are seeking?

The benefits of cash are not lost on lenders reviewing a Short Sale package. They understand that the sale has a higher percentage chance of closing than does a sale requiring a new loan. In the latter type of transaction there are many uncontrollable factors that can doom the escrow. The potential for job loss or transfer by the buyer/borrower is real these days and occurs more frequently than we all care to admit. Loan program or policy changes can also affect the viability of a loan even if it is in progress. Cash Buyers minimize such risk.

Frustration with the Short Sale process can build as time elapses. Over the two to three month period required to get Short Sale approval from a lender, the Market can change. New listings become available that can tempt a Buyer currently under contract. Most Buyers don't stop scrutinizing the Market because they are under offer. If a preferable property becomes available some Buyers yield to temptation. Most will wait until they have the opportunity to quit their original transaction per the terms of the contract, but the point remains that they quit and all the efforts by the Lender(s), Agents, and Sellers are for naught. Cash Buyers have typically negotiated the right deal on the right house and are more inclined to stay the course, especially with a large Deposit in play.

Cash Buyers can benefit from their cash in a variety of ways. If there are multiple offers on the same property the Cash Buyer's offer is usually given preference. Cash Buyers usually put up a bigger deposit, a fact not lost on the Short Sale review lender. Many Cash Buyers buy bank owned (REO) properties because of their depleted condition and the readily available cash to repair them. The Short Sale purchase is generally in good condition and requires no additional money or time invested before the property is useable.

Our Advice: The Cash Buyer must be clear on what she is trying to accomplish. Is it buying the right house at a great price, or must it be a steal to get her to part with her cash? There is a fine line between great price and steal. It is important to not trip over dollars to save a dime. If the home has everything you want and need then appreciate the fact that your cash buying power is getting you the separation from the rest of the market enabling you to be able to buy the home you want without paying more than the next guy. This latent savings is a benefit and should be recognized. Use your cash wisely, but don't lose opportunities because you don't use it. Incredible investment opportunities are plentiful these days, but they will only return to those that invest. Don't find yourself talking in 2013 about what you could have bought in today... but didn't. Be a wise Cash Buyer and don't be afraid of the right Short Sale situation.

Short Sale transaction prices are below Market, the homes and property in fine condition, and the competition for the good ones fierce. The Cash Buyer reigns supreme in this arena and can enjoy the benefits of their purchase if they master the game of patience not usually found in a typical price driven cash sale. When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless!

Lisa Wetzel and Jim Valentine are real estate agents with RE/MAX Realty Affiliates in Gardnerville. They are short sale and foreclosure specialists and certified distressed property experts.  

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Lisa Wetzel & Jim Valentine
 RE/MAX Realty Affiliates
1320 US Highway 395 N.
Gardnerville, Nevada 89410
775.781.5472 - Cell
775.783.6854 - Direct
775.552.8585 - Fax

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