Your exclusive buyer’s agent can help you navigate certain situations that favor the buyer. They should provide you with information that enables you. But, it is helpful to recognize problems where you have a bargaining advantage and understand the potential risks and rewards.
DivorceDivorce
The marital home is almost always a contentious issue in a divorce situation. Aside from the financial commitment, there is an emotional attachment and sweat equity. If the house is on the market and is part of a divorce settlement, buyers can obtain a bargain since the agreement mandates a sale.
However, you will deal with two different parties that have a long history together, the latest of which may have been hostile. This can make hammering out a deal protracted.
Estate saleEstate sale
Heirs selling a property is another situation where you can obtain a bargain. They often look for a quick sale 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, mainly if this requires coming into the city far away. 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, drawing 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 a permanent certificate of occupancy. This could mean putting in a lot of work to bring the apartment up to code and your liking.
ForeclosureForeclosure
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 their mortgage payments. It has reached a point where the bank, which holds a lien on the title, has threatened or 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. The bank has not yet foreclosed in these situations but has agreed to a sale that will bring in less than the owner owes. There is a potential bargain in these situations, but you must deal with the homeowner and bank.
You may find it challenging to uncover foreclosures in the current environment as a caveat. The city’s real estate market has experienced an upward trajectory. This means many owners have equity, meaning they can sell their apartments 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.