In my previous article (Part I) I tried to define the meaning of each of these types of sales in a brief and succinct manner in order to lay the groundwork for the contents of this article which will focus primarily on the Equity Sale. Each type of sale offers its own unique challenges and opportunities or put another way each offers their own risks and rewards. Having a knowledgeable and competent Real Estate agent involved on your behalf will help you navigate those risks and rewards as well as move things along in a smooth and timely manner.
On the surface the Equity Sale by virtue of its lack of basic complications that the other types of sales offer is usually considered the best option from the standpoint of ease of communication between all parties. A typical purchase involves a purchase agreement submitted by the buyer to the seller and typically within 3 days the seller responds with an acceptance, a rejection or a counter offer. It is the acceptance part of the process that is one of the biggest rewards to purchasing an Equity Sale as the response is often much quicker than the other types of sales. This can be a rather large benefit as some buyers really miss out on some great opportunities by tying themselves up with an offer to purchase a Short Sale or REO property that may take weeks or even months to get a response. I don’t want to sound too negative against Short Sales and REO’s, but sometimes timing is everything. A good Real Estate agent will point out the risks and often hearing it from a professional will help you make an informed decision that is in your best interests. The other benefit to an Equity Sale is the State mandated Disclosure requirements for a “traditional” seller to provide the buyer with material facts that may otherwise go unnoticed. The typical contract will permit the buyer a period of time to investigate the property to their satisfaction but having the sellers disclosures does provide a good foundation for what the buyer needs to look for in their investigations and inspections. Some Equity Sales are exempt from State mandated Disclosures and your Real Estate agent will be able to explain those unique situations.
One of the negatives of an Equity Sale that should be pointed out is there is often a higher value expectation by the seller and typically there is less negotiation room on the price and other terms. Usually the difference in price between an Equity Sale and the other two types of sales is somewhere between 5 to 10% however, this is not always the case. This difference will vary depending on the market you are in and a professional Real Estate agent is a good resource to ensure that you are paying fair market value.
I have only touched on the basics of an Equity Sale and there are a number of other factors to consider before you make the decision to purchase that piece of the American Dream. In my next article I will discuss some of the risks and rewards associated with purchasing a Short Sale. I hope this information has been of value to you.
As always should you have additional questions or concerns then feel free to contact me at firstname.lastname@example.org and I will be happy to assist you. I am always available for a consultation on real estate related matters and should you need my services to buy or sell real estate then please contact me via e-mail or call me at 530-295-2911.
Warmest regards;Mike Southwick DRE License# – 01019265 Branch Manager for Century 21 Select Real Estate Placerville and Pollock Pines Article written by Mike Southwick Use only by permission