With the recent news of the hold on foreclosures, or was it lifted?… Do you know?…who knows?? Buyers are understandably wondering if there are still good values to be had. Answer – YES!. It’s long been a misconception that the “deals” are only to be found in short sales or foreclosed (bank owned) properties. Certainly, that is true in some cases. However, it’s just as common to purchase from a ‘traditional’ private seller at a price substantially lower than the peak (10 – 70% lower).
For the most part, sellers, no matter the type (REO, short sale, or traditional) are setting their asking prices using the same market data. This has been true in our 13 county metro area for quite some time (to cite a mantra, all real estate is local!).
Here’s an Example
In the Nokomis area (304), as you all know, a popular area with young professionals, small families and “downsizers.” Using 3 bedrooms, 2 bathrooms & 2 car garage as our bench mark criteria: there has been, since October 1st, fifteen (15) homes either pended or sold. In fact, there are fourteen (14) pended and only one (1), that’s right…ONE closed!
Currently, using the same criteria and an ‘On Market’ date of January 1, 2010+:
There are fifty-eight (58) houses for sale
With a price range of $89,000 – $380,000
Average market time for these properties is, one hundred and thirty-three days (133) on the market
Let’s take the bottom three: The lowest asking price is $89,900, is new to the market as of three days ago. But yet, it’s cumulative days on market (CDOM) is, 428 days, and is an REO seller. The second lowest at $90,000 with an original list price of $128,000. It is a traditional sale and has been on the market for 82 days. The third lowest priced home is currently on the market for $95,000. It’s original list price was, $129,000. This house has a CDOM of 173 days on the market. It is a short sale. Who is the most motivated seller in this scenario? I would venture the private owner: they have priced under all the competition except one. They have, in less than 85 days, done a significant price reduction/s. They are able to sell quickly and provide clear title, without bank or court delays or approvals. And have shown their motivation by pricing not only competitively, but at a price that buyers and their agent’s need to stand up and take notice.
Is the Seller Willing and Able?
At the end of the day, it takes a willing and able owner to sell the property. A short sale that has been on the market and priced right for 180 + days suggests an unwilling lender (or lenders) – they most likely have had offers that did not get approved by the bank for a variety of reasons and it’s never known at what point they will be both able and willing to approve the short sale. An overpriced listing offered by a private seller is a seller that is not motivated to sell at this time (does not need to sell) or that cannot sell below a certain price (perhaps willing, but not able).
A Good Buyer’s Agent Will…
A good buyer’s agent will know the market and will know how to uncover background and market data that will ensure a buyer is paying fair market for the property, no matter who is offering the property for sale.