Short sales have always offered a lower discount than foreclosures. This logic behind this was based on the condition of the home. Generally speaking, short sales were kept in better condition than foreclosures because the home owners still occupied and maintained the property while working with the bank towards a foreclosure alternative. Foreclosures, however, were often left in poor condition by former homeowners, being stripped of anything valuable and left neglected for months.
In about 2009, discounts for foreclosures were about 30 percent for foreclosures and short sales were about 20 percent. As short sales became more common in 2010, the difference began to shrink. In April 2010, short sales averaged a discount of about 21 percent, and foreclosures 27 percent. By January 2012, the difference shrunk to 3 percent: 21 percent for short sales, 24 percent for foreclosures. The most recent data – from March and April 2012 – discounts were at 25 percent for foreclosures and 22 percent for short sales.
As the above data reflects, the discount gap between foreclosures and short sales is being reduced. The below list shows the current average discounts offered by various banks/entities:
1. PNC Financial Group
Avg. Pre-Foreclosure Sales Price: $133,015
Avg. Percent Discount: 40%
Avg. Days to Sell: 151
2. Government Entities (Fannie Mae, Freddie Mac and HUD)
Avg. Pre-Foreclosure Sales Price: $127,618
Avg. Percent Discount: 42%
Avg. Days to Sell: 154
3. Ally Financial (Formerly GMAC)
Avg. Pre-Foreclosure Sales Price: $143,410
Avg. Percent Discount: 35%
Avg. Days to Sell: 188
4. Ocwen Financial
Avg. Pre-Foreclosure Sales Price: $126,071
Avg. Percent Discount: 43%
Avg. Days to Sell: 168
5. Sun Trust Banks
Avg. Pre-Foreclosure Sales Price: $151,308
Avg. Percent Discount: 32%
Avg. Days to Sell: 207
6. Bank of New York Mellon
Avg. Pre-Foreclosure Sales Price: $155,488
Avg. Percent Discount: 30%
Avg. Days to Sell: 283
7. Bank of America
Avg. Pre-Foreclosure Sales Price: $166,389
Avg. Percent Discount: 25%
Avg. Days to Sell: 223
If you are a real estate investor who is interested in searching for short sales and foreclosures in Silver Spring, MD, make sure you work with a Certified Investor Agent Specialist (CIAS).
A CIAS is uniquely qualified to find, create, and close with residential real estate investors using the knowledge and innovative tools earned through comprehensive education and experience. CIAS-designated agents can streamline the process of real estate investment to increase returns for investor clients by helping real estate investors navigate:
- Investment Strategies
- Self-directed IRAs
- 1031 Exchange
- Leverage Options
- Key Calculations
- Return-on-Investment
- Capitalization Rate
- Average Returns
- Cash Flow
- And much more
To begin your search for Silver Spring, MD real estate, contact Emcee Arah of the EMA Real Estate Group online or by calling 301.452.5252. Emcee is both a Certified Investor Agent Specialist (CIAS) and a Certified Distressed Property Expert (CDPE).
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