Everyone wants to avoid a bad deal. However, when you consider the sizeable transaction of investing in real estate, it’s easy to understand why it’s so important to spot those red flags before you sign a contract and close the deal in a money pit or find yourself entangled in legal battles with the sellers.
So read on as we explore four signs of a bad deal when you’re looking for real estate in Phoenix.
FSBO (For Sale By Owner) FSBO is a type of real estate transaction in which the homeowner sells their property without the assistance of a real estate agent. In an FSBO transaction, the homeowner is responsible for all aspects of the sale, including pricing, marketing, negotiating, and closing. While FSBO transactions can save the seller money on real estate agent commissions, they can also be time-consuming and stressful. Additionally, without the assistance of a real estate agent, the seller may not have access to the same resources and marketing channels as they would if they worked with an agent.
When the owner handles their property sale, it may be a glaring sign of a bad deal when looking for real estate in Phoenix. You’ll have more work to do without the assistance of an experienced real estate pro to handle the transaction. There may be trouble ahead if the sellers haven’t done any market research and set an unrealistic value on the property, something you may not realize until you are deep into negotiations and their temper flares. Professional buyers like those at Cash For Homes Arizona are investors who built their careers locally and can help you zero in on great deals. At Cash For Homes Arizona, our professional buyers have a vast network of connections providing a steady stream of investment opportunities in the Phoenix real estate market.
Short Sales or Foreclosures
Short Sales or Foreclosures Short sales and foreclosures are types of real estate transactions that occur when the homeowner is unable to make their mortgage payments and the property is at risk of being foreclosed on. In a short sale, the homeowner sells the property for less than the outstanding mortgage balance, with the approval of the lender. In a foreclosure, the lender takes possession of the property and sells it to recoup their losses. Short sales and foreclosures can be a good option for buyers looking for a deal, but they can also be time-consuming and stressful for both buyers and sellers.
With short sales, likely, the lender won’t negotiate with you for a lower sales price, and the seller owes more on the mortgage than the property is worth, which is another sign of a bad deal when you’re looking for real estate in Phoenix. With foreclosures, you’ll likely be taking on a great deal of work as they typically need repair. Professional buyers like those at Cash For Homes Arizona are experts who work with a team ready to jump into action and assess deals. At Cash For Homes Arizona, our professional buyers work with lenders on behalf of investors like you and can help you learn the ropes of this investment property sector.
Market days is a term used to describe the amount of time a property has been listed for sale. The number of market days can impact the price of the property and the negotiating power of the buyer and seller. A property that has been on the market for a long time may be perceived as less desirable, and the seller may be more willing to negotiate on price. On the other hand, a property that has been on the market for a short time may be perceived as more desirable, and the seller may be less willing to negotiate.
The amount of time a listing has been for sale can signal a bad deal when looking for real estate in Phoenix. When the days on the market begin to build over weeks and months, there’s a problem. It could be the price is set too high or too low; both ward off most buyers. There could be an issue with the marketing presentation; today’s knowledgeable buyers typically scroll past poor-quality images, or there are apparent issues with the property showing signs of disrepair. Professional buyers like those at Cash For Homes Arizona are highly seasoned negotiators who’ve handled the most extreme situations and are skilled at coming out on top. At Cash For Homes Arizona, our professional buyers can help make great deals happen to help you increase your returns.
An as-is transaction is a type of real estate transaction in which the property is sold in its current condition, without any warranties or guarantees. In an as-is transaction, the seller is not responsible for any repairs or issues that arise after the sale. As-is transactions can be a good option for buyers looking for a fixer-upper or a property that needs some work, but they can also be risky if the buyer is not aware of the property’s condition.
When a property is sold as-is, this is a glaring sign of a bad deal when looking for real estate in Phoenix. Contingency clauses allow for inspections and for corrective action to be taken before the sale closes or to provide financial reimbursement for the costs associated with any issues that the inspector may discover. Unfortunately, buyers have little recourse when a property is sold as-is and may lose money on the investment. Professional buyers like those at Cash For Homes Arizona bring their entire team to the table. At Cash For Homes Arizona, our experienced buyers and our full-service in-house team of industry specialists all work with an investors mindset to save time and money and avoid headaches.
Which Transaction is Utilized Most and Why?
Of the four types of transactions we have discussed, FSBO and market days are the most common. FSBO transactions are popular among sellers who want to save money on real estate agent commissions and who have the time and resources to handle the sale themselves. Market days is a term that is used by both buyers and sellers to gauge the desirability of a property and to negotiate on price. Short sales and foreclosures are less common, as they can be time-consuming and stressful for both buyers and sellers. As-is transactions are also less common, as they can be risky for buyers who are not aware of the property’s condition.
In conclusion, understanding the different types of real estate transactions can be helpful for both buyers and sellers. Each transaction type has its pros and cons, and it’s important to carefully consider your options and work with a qualified real estate professional to ensure that the transaction is structured correctly. Ultimately, the transaction type that is utilized most will depend on the individual circumstances of the buyer and seller.
If you want to avoid running your real estate investment business aground, the pros at Cash For Homes Arizona can help you navigate the waters. Talk to one of the professional investors at Cash For Homes Arizona for smooth sailing when looking for investment real estate in Phoenix. Call Cash For Homes Arizona at 480-680-8927.