If you're a central New Jersey home owner, and especially if you're considering buying or selling a home in the near future, be aware of an important fact recently brought to light by the folks at Keeping Current Matters: Banks are moving at a steady pace to get foreclosure paperwork in order. Over the course of the next six months, you'll see more and more distressed properties being brought to the marketplace.
Why is this important to you? Because this influx of of discounted properties could have a potentially significant impact on the values of neighboring homes, one of which might be yours. Your primary question is just how much of an impact is possible?
According to RealtyTrac, a foreclosed property generally sells for about 59% of the value of a similar non-distressed property. If you keep this in mind, you'll see that this foreclosure inventory has the potential to create two effects on values:
The first effect of distressed properties will be as discounted competition for your home. You can count of a segment of buyers who will use purchase price as their primary criteria – those folks will probably prefer the discounted property regardless of its condition. Even if the distressed property needs massive repairs, those buyers are only going to be looking at the fact that they can get a property at a 41% discount. When they're released by the banks, those foreclosed properties are going to put downward pressure on all values, as they eat into the demand for housing.
You can put your house into contract, but the second effect of the pending glut of distressed properties is the possible impact on your transaction. Your property will need to be appraised – unless your buyer is paying cash outright – by the bank who will be giving that buyer the mortgage to complete the purchase. Under normal circumstances, this wouldn't be a concern, but here's the sticking point: Banks are instructing appraisers to use the discounted properties in determining the values of non-distressed homes. This is important to keep in mind.
The bottom line is simply this: If you're considering selling, now is probably the best time. As a savvy seller, you want to be sold and closed before these properties come to market and have the potential to impact your price. We are The Marchany Team, and we know all of central New Jersey.
We're where you are, whether you're in South Brunswick or Monroe (Middlesex County). If you're in Mercer County, let us do the legwork for you in Princeton Junction, East Windsor, West Windsor, and Robbinsville. And if you're ready to sell in Franklin Park or Hillsborough (Somerset County), we're prepared to find the buyers who are looking for your home. Call The Marchany Team today at (732) 997-0019, and don't forget to “Like” us on Facebook! We are dedicated to helping you in every way possible.
Comments(2)