What is the Best Deal?

by Joshua Jarvis

What’s the best deal? Foreclosures, Short Sales, New Construction, Oh My?!

In the Atlanta Real Estate market we get all kinds of calls from home buyers that think there is one particular “type” of sell that is the best deal. The reality is you must understand the market and you’ll need the help of an experienced real estate agent and lender in order to make a good decision However, we can cover some general basics for the typical types of home.

Foreclosures

AKA REO, AKA HUD Homes, AKA Bank Owned, AKA Corporate Owned. They’ve got a variety of names, some appropriate and some not from this list. However, most home buyers mean homes that the bank took back from the previous owner to resell.
Foreclosures are typically in worse shape then resells and priced lower. Right now, there’s usually a bidding war for these lower priced, equity rich homes. However, some lenders can’t lend money on homes that are in disrepair and most of these homes come with the largest amount of risk, since there’s a good chance that a thorough inspection can’t even be done due to problems turning on utilities.

Short Sales

Four years ago, short sale was a bad word to everyone but the home buyer. Now short sales are common place and most home buyers know that they can take the longest to close. The listing agent is often the one that can determine whether a short sale will close or not. Their skill in dealing with the bank is usually all that matter. If you are a home buyer, then make sure your agent is “qualifying” the short sale listing agent by asking questions such as “how many have you closed?” and “do you handle negotiations in house or outsource?” If they say they outsource, watch out, the home is likely to be foreclosed on. (This is relative to states that practice non-judicial foreclosure).

New Construction

You might not think that new homes are good deals, but you’d be surprised. Many new builders have entered the market place and they have some new ideas. They aren’t building as many spec homes and you might be able to negotiate a great deal on a “custom” home in the future. With the market rising this way you might even walk into equity.
Builders also hate sitting on homes so you could just as easy pick up a spec home or a home that was someone else but it fell through.