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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.
Contact them at
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