I am in escrow with the first “normal” transaction I’ve had for awhile.
By normal I mean the property being bought is not owned by a bank and the owner is not in a distressed situation. This is the way real estate transactions are supposed to be. No as-is addendums or negotiating with the bank against the threat of a trustee sale.
This normal transaction reminds me why distressed property sales are so bad for the real estate market. A distressed sale is usually going to sell at a discount. One reason for that is because the seller does not offer the normal seller warranties such as the condition of the property or the type of title to be conveyed. The bottom line is the buyer takes more risk and therefore wants to buy ay a bigger discount to compensate for that risk.
The other factor that pushes sales price down in a distressed sale is the buyer is looking at the comps in the area and naturally wants to pay no more, or maybe a little less than the previous sale. This can cause a downward spiral in prices like we have seen over the past couple of years.
In a normal sale the opposite can happen. The buyer tends to be willing to pay a little more because the property is typically in better condition and there are not as many risks like a lack of seller disclosure when you by a bank owned property.
Doing a normal transaction is a refreshing change and I think we will see more and more of them as this sick market tries to heal itself.
Cheers,
Rod
RE/MAX