Let's Not Forget the "Diamond in the Rough" - Standard Sales
The current real estate market, while saturated with Short Sales and bank owned properties, gives great opportunity to those homeowners who are thinking of selling and have positive equity. Positive equity means that the value of a home is greater than the money owed to pay off the loan. This type of sale is known as a standard sale. Standard sales are more of a rarity in home buying today, but they are definitely worth finding.
The real estate market offers three types of purchases to buyers. Short Sale, Bank Owned and Standard Sales. Short Sales and Bank Owned properties can seem to be a great deal for buyers, but when dealing with banks, there are many steps and regulations that must be fulfilled before the purchase can be completed. In a standard sale, the homeowner makes all the decisions on whether or not to accept an offer.
In a Short Sale, the homeowner is trying to avoid a foreclosure. In order to do this, the homeowner petitions the bank to allow their home to sell for less than what is owned on the loan. Before the bank will approve the sale, they want to see an offer from a buyer. Once an offer is received, the bank will begin to work through their procedures to approve the sale. It can take 60 to 90 days before the bank approves a Short Sale and before escrow can begin. Once escrow is opened, it can take an additional 30 to 45 days before it can close. When purchasing a standard sale, once the homeowner accepts an offer, escrow is opened immediately and the sale can be completed within 30 days.
A bank owned property is a home taken back by the bank through the foreclosure process. While the purchase of a bank owned property is not as lengthy as a Short Sale, the home may not be in “move in” condition. Many of these foreclosures are missing fixtures, appliances and may need a great deal of repair. A foreclosure is purchased “as-is” which means the bank will not pay for any repairs unless they are mandated by government regulation. So this can mean additional cost and time invested before the home can be occupied. In a standard sale, the homeowner is selling their home by choice. They tend to have a pride of ownership, which means the homes will more than likely be in good shape and if there are any repairs to be made; negotiations are conducted directly with the homeowner.
While every situation is different and every home purchase has it’s own challenges and blessings, purchasing a standard sale home can prove to be less headaches for buyers. The best thing a buyer can do is enlist the help of a professional real estate agent who is familiar with the current real estate market and can lead them through the process.