But That was a Foreclosure.......
Recently when discussing comparable sales with potential sellers I have been hearing the response, "but that was a foreclosure." The fact that a recent listing or sale is a foreclosure does not make it irrelevant in determining the price of a property.
If the house for sale next door to you is a bank-owned home, but all the other homes for sale in the neighborhood are not, you don't have much of a problem. However, if most of the homes that have recently sold in your area were bank-owned homes and short sales, you have a problem. That problem is you must compete with foreclosures and short sales to sell your home. Your home's market value is directly related to distressed sales if those short sales and foreclosures dominate the neighborhood or community.
Some thinking points on the topic:
It doesn't matter much how much you think your home is worth if a buyer disagrees.
Why would a buyer's lender's Appraiser, appraise your home for more than a foreclosure or short sale?
How much more is your home worth than a distressed sale?
The truth is your home is not worth a whole lot more than a foreclosure, if all the recent sales are foreclosures and short sales. However here are some tips that can make your home stand out in a crowd of foreclosures and award you with a bit more money from your sale.
PICTURES-The loveliest home doesn't have a chance with the poor photography. Buyers are looking for homes on the internet...pictures say everything! Typically one outside shot means the listing is a foreclosure or corporate-owned house.
CURB APPEAL-If the house is small, remember if you plant your bushes and trees at the corners of the exterior the house appears much larger. Wash down the exterior of your house. Many foreclosures will leave their future owners with a lot of yard clean up. Make sure your landscaping is well kept.
CLEANLINESS: Believe it or not, this can make your home more valuable. Either do it yourself or hire a cleaning service to come in and deep-clean your house. Nobody buys a dirty shirt, unless they are getting it on clearance. Foreclosed homes are typically not very clean as they have been vacant for some time .
WARMTH-As far as colors go, it's good to have some color in your home. Buyers like neutral colors. They want to see a home that has been cared for and loved by the seller but they do not want colors that will overwhelm or take several extra coats to cover up once they move in. Stark white walls make a house look cold and unfinished. In this market, most home owners do not have the extra cash to hire a home staging specialist. Ask your Realtor for advice or visit some of the model homes at new developments for ideas.
SMELL-Consider the smell of your home, foreclosed homes often have strange odors. Try baking cookies before your realtor holds an open house.
PRICE- The absolute most important thing you can do to help sell your home in our current market is to price it either at or below market value. If you price your home too high, today's educated buyers won't even bother looking at it. Buyer's want the best house for the best price!
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