What is going on with the real estate pricing games? We have the following: Overpriced properties among abundant competition, Market priced properties among abundant competition, Under-priced properties among abundant competition. What's it all about? Price?
Consumers look at price first, then after looking at the competition, they realize it's a bit more complicated than just the price. If the property is in foreclosure, their may be issues associated with attainablility, response time and/or terms associated with the third party approval. If the property is foreclosed, their may be issues associated with attainability for certain types of buyers, certain types of financing and/or response time.
Buyers sifting through the general pool of inventory are becoming more aware of the issues associated with lender mediated properties, properties in foreclosure and already foreclosed bank/corporate owned properties. All of the properties appear to be for sale and appear to be attainable. However, many are simply not attainable because they are clearly overpriced and/or they are not approved to be sold in a short equity position.
More and more consumers are aligning themselves early with professionals who can handle lender mediated properties both in foreclosure or post foreclosure. The pricing strategies have evolved significantly in the past 2 years for all types of properties; including lender mediated foreclosures, REO Bank Owned Homes and conventional retail homes for sale.
Conventional sellers have realized that they need to be competitively priced among the lender mediated foreclosures and the bank owned REO's. Certain REO asset managers and/or banks have pricing strategies that step down in a 'Reverse Auction' format whereby they step down their Broker Price Opinion list every 30 days by 5 to 10 percent until they receive multiple offers. Some REO pricing strategies simply price their original list significantly below the average Broker Price Opinion to obtain immediate multiple offers that generally are well above the list price. Next comes the lender mediated 'Short Sales' that require lender approval. This generally means the buyer(s) submit their offer on a fire-sale priced property and await lender approval that may take 4 to 6 weeks for a response. Only to realize the response was a counter offer that may again take an additional 4 to 6 weeks response. Now another new pricing strategy is evolving in the Twin Cities marketplace as well as other market centers. New Construction financing companies who have taken back builder assets are beginning to fire-sale their 'white elephant' assets and coupling new build projects along side those assets at a slightly higher price. Wow, how ingenious! These construction financing companies are turning bad money projects into active marketplaces while minimizing their losses, carrying charges and hold times.
Consumers are clearly shopping in a perfect marketplace. Historic low rates and prices combined with flexible ownership options. The only missing piece for consumers is simple. A trained and experienced real estate professional who is experience with lender mediated properties and conventional properties.
EXIT Realty Executives (763) 548-1444
Comments (2)Subscribe to CommentsComment