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Types of Home Sales
Explore your financing options and find the loan that fits your homeownership goals.
Choosing the right home loan is one of the most important steps in the homebuying process. With a variety of financing options available—each designed to meet different financial situations, goals, and credit profiles—it’s essential to understand how they compare. From conventional and FHA loans to VA, USDA, and specialty programs, this guide will walk you through the most common types of home loans so you can make a confident, informed decision that aligns with your long-term plans.
Short Sale
What it means
A short sale is the sale of a home in which proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner can no longer make the payments.
Potential risks to keep in mind
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Up to 3 months to receive a response on an offer
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2-9 Months to Close, must have flexible move dates
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Financing obstacles – potential interest rate changes
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The price can still change, even after the seller accepts
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Seller could back out at any time, even if you have paid for an appraisal and Inspection
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Condition of the property is not guaranteed after closing
Potential benefits to the Buyer
You might get a good deal – below market value
REO (Real Estate Owned)/HUD–VA Foreclosure
Bank and Government Owned Properties
What it means
REO is an acronym used by financial institutions, which means Real Estate Owned. It comes back into the bank’s portfolio via a foreclosure process. The seller will most likely not make any repairs.
Potential risks to keep in mind
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Response time from the bank can take up to a week
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Condition of Home is not Guaranteed
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Often have a multiple offer situation
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Surprises that often take place after close
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Possible Title issues
Potential benefits to the Buyer
You might get a good deal, but at some cost or additional expense to you
Owner Occupied
What it means
An owner occupied property is a property that is owned by a person (non-bank or government) that may or may not be occupied by the person that is on the Title. When you negotiate on an owner occupied property you are negotiating with the owners themselves.
Potential risks to keep in mind
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Seller has an emotional bond with the property
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Home can be over-priced at times, because of the bond to the home
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May not be able to get the lowest price – flexibility to negotiate is necessary
Potential benefits to the Buyer
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Easier to get financing
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More dependable timeframe
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Price doesn’t generally change after contract is accepted
THIS IS THE MOST COMMON TRANSACTION
New Construction
What it means
A property that will be built to suit a client’s specific needs or a home that was built but has never been lived in. Typically you are dealing with a builder who is very concerned about the bottom line, but typically provides a great home warranty. Your agent should be present when you go through Builder Models.
Potential risks to keep in mind
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The builder may not have the home built in the time frame they have given
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Problems and changes regularly happen in the build process
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May not be able to get the lowest price – flexibility to negotiate is necessary
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Requires expertise to handle initial showing, Agent should attend to protect your interests
Potential benefits to the Buyer
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Easier to get financing
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Price doesn’t generally change after contract is accepted, unless buyer adds features
DO NOT PURCHASE NEW CONSTRUCTION WITHOUT AN AGENT REPRESENTING YOU. THE SITE AGENT REPRESENTS THE SELLERS!