What is an Arms Length Transaction?

Home sales can fall under any number of characterizations: Short Sale Potential, In Foreclosure, Bank Owned, and Relocation are just a few. The most common type of sale by far is called Arms Length.

An arms length transaction is one in which the buyer and seller act independently of each other, have no relationship, and are not acting under pressure from an outside party. An arms length transaction will yield a price very close to the market value since the seller wants to sell for as much as possible and the buyer wants to buy for as little as possible.