Canada to Arizona Real Estate Info
Are there differences between buying an owner occupied home, and REO, a short sale or a new build?
Is it hot here in July?? Sure there are differences in the process, as well as time lines and costs.
First let's cover the difference between resale and new build. With new build, the first thing to keep in mind is that no matter how friendly the on-site sales agent is, he or she works for the builder and not you. (That's why you should have me go with you to any new community!) You will probably be asked to fill out a registration card. Don't fill it out, you are not required to do so to see the models. As long as the builder doesn't have a registration card on you, you can have a REALTOR represent you. In any real estate transaction it is best to have your own representation, especially if the other side does.
New home builders typically don't belong to the National Association of Realtors, and therefore don't function under the same set of guidelines or ethics. Contracts for the purchase of a new build are written by and for the advantage of the builder, whereas Arizona Association of Realtors contracts are slanted in favor of buyer protection.
Now despite these warnings, builders are suffering in this market as well, and there are some great deal on new builds. There are advantages to new builds, including it being fresh (no one lived in it before you), and there are builder warranties. Builders tend to place greater incentives on "spec" homes to reduce inventory. Build time will vary by builder, but you can expect a new build to run 4-6 months.
Now, when talking about resale, again there are vast differences in the process for standard purchases, bank owned (REO) and short sales. A typical purchase, from a property owner will usually take around 30 days from offer acceptance to closing. It can be less upon agreement, and often is for cash purchases. There are many things that occur during this period, that will apply in any purchase. For more about these aspects click on the NEXT button below. This type of purchase is the most straight forward. Response to an offer normally occurs within a day. We deal directly with the seller for the offer, negotiations and any repairs if necessary.
Bank owned properties, also known as REO's (Real Estate Owned) typically take 30-45 days from acceptance to closing. Often, a response to an offer will take 3-5 days. This occurs because the offer is submitted to a corporation not an individual. There is a department that handles foreclosure properties, and often times, it will need the approval of more than one person. Once it is accepted, the seller will counter with their own addenda to the contract, primarily limiting liability and acknowledging that they are not aware of any issues with the property since they did not reside in it.
Short sales occur when the seller owes more than the market value of the property. The lender holding the mortgage has to approve the short sale, in which case the lender accepts the lesser amount. Lenders tend to prefer this route versus foreclosure, as it can limit their losses. Unfortunately though, this process can take2-4 months, and the majority of short sale offers do not get completed. There are many reasons for this. When the offer is submitted, it is best to know if the seller has already provided the necessary short sale documentation to the lender. This will help minimize the timeframe. If the lender won't approve a short sale, you are wasting your time. Once you submit a short sale offer, it may take the lender 30-90 days to accept or reject. So you might wait all that time before you know whether there is a deal. This may not be the best situation for long distance buyers. Once accepted, the lender will issue addenda acknowledging their limited liability for the condition of the home. In both REO and short sale properties, the lender will not agree to repairs to the home. You are buying it AS-IS. Inspections will help you determine whether to proceed or not, which is covered on the next page.
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