96% or 4%

96% or 4%

To which group does your Seller belong?

Let us assume, based on data that I have seen, that 30% of Homeowners own their homes free and clear, or that they have no mortgages or liens against their homes.

Second, of those remaining 70% of Homeowners who have mortgages, 94% of them are not  behind on their payments or in danger of foreclosure or the like.  This is equivalent to 65.8% of all Homeowners.

The combined total of the 30% of Homeowners, who own their homes without a mortgage, plus the 65.8% of Homeowners, who are not behind on their mortgages, equals a total of 95.8% of all Homeowners.

Almost 96% of all Homeowners are not in danger of foreclosure and the remaining 4% are in danger.

In the current realty market, nearly 50% of all sales are for distressed properties, or Sellers, who are from the 4% of Homeowners who are having difficulty making their payments.

In a normal market, these distressed sales would be ignored, when doing a comparison to determine a reasonable price for a home, because they would be a much lower percentage of the homes on the market.

In today's market, however, it is hard to ignore this large part of the market.

As Real Estate Agents, we understand all too well, the importance of price when selling a property.  The generally accepted rule is that if the property is not selling, then the price is too high.

Granted, there other factors which are impacting price, but to a large extent the fall in prices has been related to this 4% of Buyers who have not been able to make their payments.

Now, let us assume that a Homeowner wishes to sell his or her house.  If they are from the 4% group, then they will likely have a lower price, a fact which would be true even in a strong market.

If the Seller were from the 96% group, then, in order to compete, given that so many distressed properties are on the market, they would most likely need to lower their price.

The question is asked again: to which group does your Seller belong, the 96% or the 4%?

If 96% of Homeowners are not having a problem, then why should the value of their home be so drastically reduced?

Once the market clears itself of this 4%, will prices go back up to the values which were established just a few short years back?

Can we blame this overwhelming majority of Homeowners for not wanting to accept that their homes have substantially depreciated in value given that it was caused by a small 4% of Homeowners?