Getting a great house at a great price still requires realistic expectations.
There’s no doubt that today’s real estate market is still a buyer’s market. Short sales and foreclosures continue to provide great opportunities for buyer’s willing to do their homework. And distressed property pricing continues to exert downward pressure on home prices overall.
So while pricing is almost all plus side for today’s home buyer, it’s important to remember that there’s still a process for buying a home. And that process is largely out of the buyer’s control. Especially when it comes to short sales and foreclosures. And often times, that’s where the trouble starts…
Let’s take the example of “Dan,” a buyer who is familiar with the local market and ready to take advantage of a good deal on a short sale property. He’s researched properties online, found a few he likes and even had a local friend check them out in person. He settles on a property, has his Realtor present a cash offer and he’s ready to go.
Or so he thinks. The thing is, Dan didn’t really make an offer to a homeowner. He made an offer to a bank or group of investors. So Dan just went from being king of the hill, the buyer that everyone is courting, to a number. In the seller’s lender’s eyes, Dan’s offer is simply one figure in a complicated equation designed to limit losses for the bank/investors. And if Dan’s offer doesn’t fit the equation, there are plenty of other buyers out there that are willing to play ball.
And this is the point where so many home buyers today get frustrated. After weeks and months of being courted, pampered and catered to, the minute they make that offer, they’re just a number. And the bank is in control.
Need to get answer on the status of your offer/contract quickly so you can move on to the next house, if necessary? Get in line. The bank will get back to you on their timeframe, if they can find the seller’s file with the proper updated info (many times it’s lost for weeks or just sits untouched).
Need to close on a specific date based on your work/family/travel schedule? No problem. If you can’t make the bank’s date, we’ll find someone who can.
You were able to get all the extra documentation and information required by the bank in their ridiculously short timeframe (usually, just a few days)? Congratulations. Now sit back and get comfortable…you may not hear back from the bank at all for months.
It’s frustrating, to be sure. But it’s also the new “business as usual” when it comes to purchasing a short sale or foreclosure. If uncertainty makes you uncomfortable, especially when making one of the largest purchasing decisions of your life, a more traditional home sale may be the best route for you. But if you’ve got the flexibility—and fortitude—to play by the bank’s rules, buying a distressed property can be a winning proposition.