Things your Realtor® Should Tell You
If you are home buyer in this market, your Realtor® should tell you these three things:
1. Short sales are selling, BUT they remain an exercise in patience
Statistically, we are seeing many short sales close. In fact, year over year, as reported we are seeing an unprecedented increase in sold short sales. However, I suggest that home buyers still stay cautious. What we don’t know is how long these escrows have been open and how long each one is taking to actually close. Anecdotally, they are taking anywhere from 45 to 60 days to get an acceptance from the bank. You can expect to add another 30 - 45 days to actually get your own loan and the escrow to close. So this can be, as you see, a long time. The days of making an offer and moving into your home 30 - 35 days later are gone. At least when it comes to short sales. So, be advised, home buyers, and learn patience. It isn’t easy, of course when you’re waiting to hear back and then hear a no or a maybe from the bank, but be prepared for it. And don’t get too attached to the home until you have a definite yes!
2. Many REOs are underpriced
Many first time home buyers seem to be having trouble with this fact. They read everywhere that homes are cheap and then they find an REO that seems like an incredible deal. Well, okay, they say, that works. And then they offer the asking price. After making these offers on about five to six homes they lose hope and decide to wait until the market gets better. What happened? The bank was underpricing the homes. The banks assume buyers are getting CMAs and they’re playing the game with them. Realtors® would do well to tell you this, but sometimes they worry that you might think they’re trying to get you to offer more and therefore are not on your side. However, I believe they are doing you a disservice if they don’t tell you that the home is underpriced. If you walk into a pristine home and the price is too good to be true, remember that it probably is! REOs are underpriced by banks and lenders in the hope that they will receive multiple offers and the ultimate price they get for the home is much, much higher.
3. This is a good market, but…
…you must be prepared. Make sure you know the area you are buying in, and get a CMA from your Realtor®. Most importantly, before you even go shopping ensure that you are pre-approved, have spoken to a lender and have the down payment set aside. This market provides incredible opportunities for the home buyer who is prepared to pounce on the right home, but if you are not ready the chance might just pass you by. If you are even considering buying a home today, the first step is to speak with a lender. Check your credit, get pre-approved, know what your payments will be every month and work backwards until you know the price you can afford. Only then, head out to look with a buyer’s agent you trust.
Good luck!
