What is a Conventional Sale when buying a house?
Buying a house opens up a world of possibilities - and questions! One of the first things you'll discover is that not all home sales follow the same path. While some properties might be tied up in complex bank processes or distressed situations, a conventional sale represents the most straightforward way to buy or sell a home.
Conventional Sale: A conventional sale occurs when a property owner sells their home through the standard process, with the seller having sufficient equity to cover the sale price and associated costs. This type of sale typically involves either a property that is owned outright or one where the mortgage balance is less than the expected sale price.
Understanding Conventional Sales
Think of a conventional sale as the classic way to buy or sell a home. The seller owns their property and has enough equity to sell it without needing special permissions or extra steps. You'll work directly with the seller (through real estate agents, of course), making decisions about price and terms without a bank calling the shots.
The seller's equity position makes all the difference here. They need to have enough value in their home to pay off their current mortgage (if they have one) and cover the typical costs of selling. This clean financial slate creates a smoother transaction for everyone involved.
Benefits of Conventional Sales
If you're buying a home through a conventional sale, you'll appreciate the straightforward nature of the process. You can request repairs during your inspection period, negotiate freely on price, and stick to normal timelines for closing.
Sellers benefit from having full control over their sale. They can:
Set their asking price based on market conditions
Choose which offer works best for them
Make decisions about repairs and credits
Work with their preferred timeline
Conventional vs. Other Sale Types
Unlike short sales, where the seller's bank must approve a price below what's owed on the mortgage, conventional sales put the power in the seller's hands. Foreclosures involve banks selling properties they've repossessed, while REO (Real Estate Owned) properties are bank-owned homes that failed to sell at auction.
The conventional sale process moves more quickly than these alternatives. You won't wait for bank approvals or deal with corporate decision-makers - just regular people selling their homes.
The Conventional Sale Process
The typical conventional sale follows a reliable pattern:
Sellers list their home and market it to potential buyers
Buyers make offers based on market value
Both parties negotiate terms that work for everyone
Inspections and appraisals happen during set timeframes
The closing process follows standard procedures
Common Misconceptions
I often hear buyers confuse conventional sales with other terms. No, not all home sales are conventional - some involve complex situations with banks or other parties. And contrary to popular belief, conventional sales don't mean cash-only deals - most buyers use mortgages to purchase these homes.
Don't mix up conventional sales with conventional mortgages, either. While they often go hand in hand, they're different concepts. A conventional sale describes how the property is sold, while a conventional mortgage refers to a specific type of loan.
Tips for Success
For buyers, preparation makes perfect. Get your finances ready by:
Saving for a down payment
Getting pre-approved for a mortgage
Studying local market conditions
Sellers should focus on:
Making necessary repairs and improvements
Pricing their home competitively
Preparing for showings
Conclusion
Conventional sales offer a clear path to homeownership, free from many of the complications that can arise in other types of property transactions. With proper preparation and understanding, you can navigate this process smoothly.
Contact Bellhaven Real Estate today. Our experienced agents will guide you through every step of your real estate journey, whether you're buying or selling. Let's make your real estate goals a reality together.