Property Types

Owner Occupied

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

New Construction

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

Short Sale

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

Foreclosures or REOs

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