An owner occupied property is a property that is owned by a person that is on the Title. When you negotiate on an owner occupied property you are negotiating with the owners themselves.
Keep in mind:
- Seller has an emotional bond with the property
- Home can be over-priced at times, because of the bond to the home
- May not be able to get the lowest price
– flexibility to negotiate is necessary
Potential benefits to the Buyer:
- Easier to get financing
- More dependable timeframe
- Price doesn’t generally change after contract is accepted
A property built to suit a clients specific needs or a home that was built but has never been lived in. Typically you are dealing with a builder who is very concerned about the bottom line, but typically provides a great home warranty. I should be present when you go through Builder Models or negotiate with the builder site agents.
Keep in Mind:
- Requires expertise to handle initial showing, Agent should attend to protect your interests and review builder upgrades, contracts, and procedures. Construction loan or deposit up front needed to hold
- Changes regularly happen in the build process and the closing date might be delayed
- May not be able to negotiate much off the listing price due to builders tight margins and as lots are released prices increase on pre-sales. Standing inventory is typically sold at 100% list to sale ratio.
Potential benefits to the Buyer: Easier to get financing, Price doesn’t generally change after contract is accepted, unless buyer adds features
A short sale is the sale of a home in which proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner can no longer make the mortgage payments and there is a hardship.
Potential Benefit: Might get a “good deal” under market value.
Keep in Mind:
- Must have approval by 3rd party, could be more approvals needed (ex: investor or 2nd bank)
- The 3rd party can impose conditions on the sale beyond what is negotiated between buyer and seller on the original contract. - Up to 1-3 months to receive a response on an offer, could be longer or never if the home is not price approved and the highest offer received.
- The 3rd party can require other offers while yours is in the process of being approved. - Another better offer can be accepted at any point in time, lower acceptance rate
– 20% or less - Financing obstacles
– potential interest rate changes during 3rd party approval waiting period - You might be required to get a 2nd pre-approval by the 3rd Party lender as a condition of sale.
- The price can still change, even after the seller accepts
Bank and Government Owned Properties – HUD, VA, FannieMae, FreddieMac, Auction. Real Estate Owned. It comes back into the bank/government portfolio via a foreclosure process. Most REO properties are sold AS-IS with the seller making no repairs. It is also addressed in their corporate addendums stating that the buyer will purchase AS-IS, but still have the right to contingencies of inspections.
Keep in mind:
- Response time from the bank can take at least a few days
- AS-IS condition – how handy are you?
- Often have a multiple offer situation, yes..a bidding war
- Surprises that often take place after close - Possible Title issues
Potential Benefit: Might get a “good deal” under market value