Certain situations favor the buyer, which your exclusive buyer’s agent can help you navigate. In fact, he/she has an obligation to provide you with information that helps you. But, it is useful for you to recognize situations where you have a bargaining advantage, and understand the potential risks and rewards.
In a divorce situation, the marital home is almost always a contentious issue. Aside from the financial commitment, there is an emotional attachment along with sweat equity. If the house is on the market and being as part of a divorce settlement, this could mean buyers can obtain a bargain since the agreement mandates a sale.
However, you are going to deal with two separate parties that have a long history together, the latest of which may have been hostile. This can make hammering out a deal protracted.
Heirs selling a property is another situation where you can obtain a bargain. Often, they are looking for a quick sale in order to raise cash and not worry about the upkeep. They are ready to move on and do not want to spend their free time traveling back and forth to deal with issues, particularly if this requires coming into the city from a far distance. The quick sale can mean a discounted price for you.
An estate sale is not for everyone, though. You could have to deal with multiple parties, which can draw things out. They may have disparate views, including an acceptable price. If they live in different states or do not get along, this creates another roadblock. The heirs may list the property “as is.” The estate may also require you to obtain the permanent certificate of occupancy. This could mean having to put in a lot of work to bring the apartment up to code and your liking.
There is an opportunity for buyers if a homeowner is facing foreclosure, or the bank has already foreclosed. In these situations, the buyer has fallen behind on his/her mortgage payments. It has reached a point where the bank, which holds a lien on the title, has threatened or actually repossessed the home and will sell it to recoup the amount the borrower owes.
Since banks are not in the real estate business and do not want to own the property, you can obtain a bargain. You have to go through the bank’s bureaucracy, however. Short sales became popular during the economic downturn. In these situations, the bank has not yet foreclosed but has agreed to a sale that will bring in less than the owner owes it. In these situations, there is a potential bargain, but you have to deal with the homeowner and bank.
As a caveat, you may find it challenging to uncover foreclosures in the current environment. The city’s real estate market has experienced an upward trajectory over the last several years. This means many owners have equity, meaning he/she can sell their apartment and pay off the loan. In the case of co-op buildings, boards try to avoid distressed sales by typically requiring a sufficient liquidity reserve to cover one to two years’ worth of maintenance charges.