I just got back from our bi-weekly broker's tour of new listings in Sisters, and I was floored to hear the pitches of not one but two different agents whose properties we were touring. They stood, when describing their new listings (both of which are short sales), mentioned the sales price but then quickly added, "But, of course, as you know, the price doesn't really matter."
Excuse me? The price doesn't matter?!! Were they joking? When is price not an issue in the sale of a home? Unfortunately, they were serious. And seriously misinformed -- or perhaps just uninformed. Most people here (buyers, sellers and brokers alike) -- are still novices to the ins and outs of the short sale, myself included (I closed my first one two months ago). That's one reason I just completed the Distressed Property Institute's Certified Distressed Property Expert course. I realized that those of us in the business of selling real estate -- even those who choose not to specialize in short sales and foreclosures -- had better get up to speed on how to buy and sell these properties, or we aren't going to have much business to juggle in the next few years.
One of the many things I learned from the course is that nowhere is proper pricing more critical than when dealing with a distressed property, especially a short sale. As the course manual states, "Pricing a short sale and the subsequent pricing reductions are the single most important factor in getting a contract and having your short sale approved."
For sellers, proper pricing is critical because they have a finite amount of time (often, a matter of months) before they lose the home to the bank via foreclosure. Price the home too high, and you won't attract any buyers. Price it too low, and you'll spend months waiting for a bank approval that will never come. Neglect to adjust the price as time progresses, and you're wasting everyone's time.
For buyers, proper pricing is critical because, in all likelihood, they're going to invest several months in the buying process -- all of which will be for naught if they come in lower than the bank is willing to negotiate. (By the way, all you buyers who are being told that banks are so desperate they'll accept any offer these days: That's just not true -- not in Central Oregon, anyway.)
There is definitely a strategy in pricing these homes to sell, and brokers (and their clients) who don't understand that should be prepared to handle a lot of short sales that never manage to close.
About the Author:
Lisa Broadwater is a Central Oregon-based real estate professional who specializes in listing and selling homes, especially in Sisters, Tumalo, Redmond and Bend. If you'd like to learn more about Central Oregon, please visit www.CentralOregonHome4You.com.
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