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So You Are a Traditional Seller in a Market Bloated with Foreclosures and Short Sales

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Real Estate Agent

 


Most home sellers in Northern California understand this isn't a joyous time to be marketing property. Foreclosure numbers continue to rise, and are causing distress for sellers not in the same financial crisis as some homeowners, who are either trying to weather dramatically increased mortgage payments, while finding themselves owing more on their mortgage than the house is now worth. Still others face the specter of foreclosure.

"Pricing on residential real estate is collaterally controlled presently, by the incidence of foreclosure rampant in many of the country's neighborhoods,"

Buyers are bottom fishing for homes with the full knowledge there is blood in the streets stimulated by the number of home foreclosures. And these Buyers are fishing for the lowest possible prices, further driving down price. Therefore Sellers NOT living under threat of foreclosure, still need to compete with properties, which are.

There are a number of things a "traditional" Seller can do to successfully market their property, and remain competitive. (1) Price the home appropriate to where the market is currently with good comparative sales data in your area. (2) Because many foreclosed homes aren't in good repair, make certain your home is in tip-top shape. (3) Most bank-owned properties (foreclosures) are being sold "as-is". Offer your home with a roof certification, and termite clearance. (4) Make certain your home shows perfectly and appears inviting. Most bank-owned properties are vacant and cold appearing.

Overpricing your home in the current market will cause it to sit idly unsold, and possibly delay any move you anticipate making, indefinitely.

However, slightly under-pricing a home can bolster attention and buyer activity, improving chances to sell more quickly.

As in all housing markets, price and condition are paramount!

More than ever before, acquiring an experienced Real Estate professional, will pay dividends in assisting you in getting your home SOLD.  I look forward to hearing from you!

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Myrl Jeffcoat ActiveRain Signature
  

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Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Hi Myrl, I think this sentence sums up your entire post,

"Buyers are bottom fishing for homes with the full knowledge there is blood in the streets..."

Jul 09, 2009 09:08 AM
Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

Myrl, you said it all. It is so difficult right now to sell a home that is not in the foreclosure or short sale catagory. Well, the short sales aren't easy either.

Jul 09, 2009 09:44 AM
Cathy McAlister
Cathy Ashley McAlister, GRI CDPE - Broker / Sacramento - Sacramento, CA
Sacramento DRE#00648507

A seller in today's market may get a small premium for the ability to sell quickly and disclose properly; the ultimate price will still be heavily weighted by the REO's and shorts.  The better perspective is not what they are losing but they may gain in price on their next purchase.

Good Post... especially for our Sacramento market.

Jul 09, 2009 10:08 AM
Jim Hale
ACTIONAGENTS.NET - Eugene, OR
Eugene Oregon's Best Home Search Website

I agree with Cathy that talking about the future is the main theme we need to strike.  After all is said and done now, that future equity situation is the most important to our clients.  Equity-out now is not the only determinate of future equity....and it may not be the most important.

I am thankful that in my area, our foreclosure and short sale rates do not approach yours.

Jul 09, 2009 10:33 AM
Mary Strang
Viroqua, WI

If you don't have to sell wait awhile, otherwise price right because as you point out it will sit idle and not sell.

Jul 10, 2009 12:23 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

Hi ya Myrl: Well put. The main problem I see in Sacramento right now is falling inventory. We've gone from a high of 8,096 homes for sale from April of 2008 down to 3,583 for June of 2009.

Traditional sellers need to be priced in line with the foreclosures and short sales. It's those numbers that appraisers use, so even if a seller is lucky enough to get an offer for more, it most likely won't appraise for that, and they're back to ground zero anyway.

sacramento short sale agent

Jul 10, 2009 03:16 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

Elizabeth - I agree with you about inventory currently.  I also agree that traditional sellers need to be in-line on their pricing with the foreclosures and short sales.  Although buyers love the fact that buying from a traditional seller is a whole lot easier than buying from a bank or going through short-sale Hell, it doesn't seem to be translating much in appraised value as one would think.  It is another reason why I'm advising my past clients thinking of selling to simply wait if they can. 

Jul 10, 2009 03:47 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

Sandy - There are a lot of "bottom dwellers" out there!

Andrea - The banks are ruling the show.  As William Johnson says, "It's a Lender's Market"

Cathy - One would think a traditional seller that was priced fairly would be in the "cat bird" seat.  Afterall, buyers don't need to rangle with banks, they get disclosures, and often can ask for repairs to be made.  But appraisers, usually put a cobash on any increased value, because they adhere to the comparable sales, which are neary 80% distressed properties (foreclosures and short sales).

Jim - At some point in the future things will be considerably different than they are now.  Unfortunately, we don't have a crystal ball to predict when that may be, or how it will manifest.

Mary - Absolutely - That is what I'm telling so many of my past clientele.

Jul 10, 2009 03:53 AM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Myrl - Yes the market has really shifted and home sellers have to keep abreast of this.   I just passed on said information to sellers in my area.

Jul 10, 2009 04:35 PM
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