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43 Comments on Are sellers at a disadvantage if they aren't a "distressed" property?
Melanie,
Great post BTW and interestingly enough, I have just listed a "distressed" property that is one year old and is priced about $20K under market in an neighborhood that it good with only 4 listed for sale. I have become "that" person and I'm sure to ruffle some feathers but I also know that if this home should go into foreclosure, then the effects will be greater to the surrounding homes.
In the long run it is better to get rid of these properties as quickly as possible so we can get back to normal, whatever that is.
I think properties are at a huge advantage when they ae NOT distressed. I tell buyers that there are plenty of sellers motivated by other reasons that are just as important to them as distressed sellers. One important difference, they have the ability to respond to an offer within 24-48 hours, settle on time, and address any issues that come up. It will be a much smoother transaction than a distress sale, especially for relocating home buyers who have enough stress on their plate already.
It's always a Great suprise.. when we (myself and buyers) are dealing with a "Normal seller", one that is not a short sale or foreclosure. I thoroughly educate my buyers on the difference and let them make the decision. A "Good Deal" can also be a "Normal Seller" if they price it correctly. But trying to get any equity our of your home in this market just because you think your homes is worth more than anyone else in the neighborhood is the biggest mistake a seller could do. Just price it right and try and make up the difference when you purchase your next home. Don't be greedy! Those are the sellers that aren't worth listing.
We just had a reo (in ok condition) be our competion of a fully staged -perfect condition home -with a real seller. We were hands above the reo.......and it was perfect timing to pounch on that fact. It worked, our listing sold fast -reo is still on market.
I completely agree with Margaret! It is up to us to educate the buyer about the benefits of buying a home from a seller who is in complete control of his own destiny. If that seller has a listing agent who also 'gets it' we are cookin on all burners! I just sold a listing, fairly priced, in 11 days to a buyer who made a full price offer! Why? He had lost 2 homes before this one! If the price had been padded I doubt the transaction would have been so smooth. It's become obvious to me that whether seller or buyer, MOST folks have to TRY it first before they HEAR what I am saying...
I really believe all listings need to be evaluated. Some distressed are great deals & I encourage buyer to pursue, but there are also many 'fair market' sale where owners have equity & are willing to deal as well.
Buyers often times are listening to the media and really should be listening to their Realtor. They need to be educated. In all reality this type of market si "new" to many people. What they are hearing in the media is going to influence them more than I'd like to say. We Realtors need to educate the buyers and as for the seller's....they need to know the market in their area and listen to the experience of their Realtor and price it at "fair Market Value" Amen to all of you who commented. This a great discussion!!!!!!
After letting my Buyers discover the difficulty in geting an accepted offer on REOs in a particular neighborhood due to so many Buyers wanting similar properties they have elected to move on to more traditional listings.
Melanie,
Perhaps that $10,000 means a lot to your Buyers and they are not comfortable paying that much more for a similar type home and $10,000 is relative if it is $10,000 more on a $500,000 vs $510,000 or is it $100,000 vs $ 110,000. The later could be a big difference to them. Maybe they see what is happening in the market now and do not want to push their limit and be like a lot of the people now that are upside down.
Melanie, I feel that it's not about being "distressed" but about being priced like a "distressed" as that is where the market values are at or close to. I think that they have a true advantage if they price themselves right without being distressed. Short Sales and REO's are great "on sale" properties but so many shy away from them due to what Buyers and their Agents consider them to be hassels.
In our market, if you price it competitively and make it shine....it will sell. Point blank. Period.
The public seems to think BANK OWNED = "steal." That is so not true!
They are at a disadvantage -- as many buyers only want to see foreclosures ... they won't look at anything else.
I think buyers now are like sharks. They are only looking for blood in the water (REO, short sale, great deal, whatever). So take your nice, regular, non-distressed listing and spray some catsup on it to mimic the appearance of blood. See you at the closing table:)
We have been tempted to advertise all of our properties as "pre-foreclosure." After all aren't all properties potentially "pre-foreclosure?"
Melanie,
Probably so to the general public, but a well-informed buyer knows a good deal without any labels.
I have had to tell a lot of buyers that they really needed to look at what the properties might cost in the long run... that deal isn't so sweet when the backside of it hits you like a Kenworth.
For Sure! One of my challenges has been to educate my clients that the important thing is to look at the value of the home and how it meets their needs regardless of the label of REO, Short Sale, or regular sale. Then from that decide how they want to approach it, and what the competition is going to be like for the sale. Most people come to me and say, "I see a ton of bank owned properties, I want to buy one." Thinking those are the only properties that they would be interested in. Makes it interesting, for sure.
There are many good deals out there.. Just because it is a distressed sale dont make it a good deal.
Personally I think RELO properties can hold the best deal for buyers as the company that owns the home are usually in a position to sell it for well under what they paid the employee for it and without all the hassles of an REO.
I have noticed that RELO companies are getting more aggressive in selling the homes prior to the employee buyout because we all know that it's better to take a little less now than a lot less later and that is normally how it plays out.