Sign of the times, Foreclosures

By
Real Estate Agent with The Keyes Company 3195704

Late in the morning I had a buyer walk into the office looking for s very specific area. We started on the computer and and found about a dozen homes, which we narrow down to 3 homes by lunch. We then agreed to get some lunch and get back together at 2PM, and I would also try and schedule the 3 showings for the afternoon.

All went well and and we got to see all three homes. The buyer was buying a second home within walking distance of his home, so that the son , daughter-in-law and grandkids were close by. Everything was going good until we finished the last walk through. We had just walked though 3 Bank-owned properties. The buyer looked a bit unhappy, I ask him what he thought about the homes. He answered with a question "Are there any homes not in foreclosures in this neighborhood?"  Before I could answer the question he made on more comment "I did not realize that my neighborhood  had dropped this much in value! 

What i did not realize is that the home owners sometimes do know what is going on in their own backyards. If he we selling his home, he would think that his home was worth 30% then  then the current market. So the next time work with the sellers I will make every effort to document the number of foreclosures not just the standard CMA numbers I normally use.

Chuck Mixon

The Keyes Company

Cutler Bay, FL 

Comments (6)

Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI
That is a wise idea Chuck. Luckily we do not have that many foreclosures around here.
Feb 28, 2008 02:12 PM
David Soto - Illinois Home Loans & Mortgages
Illinois Home Loans & Mortgage Refinance - Chicago, IL
that is definately a good point to point out the sellers is the foreclosures in the area, since those are the competition as well.
Feb 28, 2008 02:12 PM
Eric Reid
Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA

FL has been hit hard in fact no one has escaped the change. In the old days (1 year ago) when doing a CMA for a seller I would not include a foreclosure as it was the exception and not a fair comp as the seller could not compete and there were enough standard resales to set a fair market price.. now when I prepare a CMA I have to stress to the seller that their direct competition is the pre-foreclosure and the foreclosure and that these listing are eating away at their equity. If they don't have to say I say stay our of the market and save your equity.

 

Feb 28, 2008 02:17 PM
Lou Farris
Your Castle Real Estate, Inc! - Highlands Ranch, CO

Chuck,

Here in Colorado I have the same issues. So much so in many neighborhoods, that I adopted a new practice a year ago. I no longer do a standard CMA like we all learned in real estate school. My MBA sttistics calasses, and finance classes taight me some cool lessons. I learned that the larger the sample size, the beter the data.

 I now do a market trend analysis, based on all properties that match the subbject closely. I start with the zip code of the subject to get the initial sample,a nd then refin it to get hte subject's neighborhood,a nd the subdivisions immed=iately adjacent. From this set, I can then apply stistical analysis to produce a trend in the neighborhood.

Apppraisers love working with me, and the banks are ecstatic, because these are numbers that validate the trend for the decision making porcess.

Feb 28, 2008 02:18 PM
Maria Holland
RE/Max Homes & Estates, ABR,GRI, CDPE, SFR - Nashville, TN
Realtor, ABR, GRI, CDPE, SFR
Very good idea.  I just listed a home where there are 60 foreclosures in this search area.  I told him it was really hurting his property values.  His home is not only hardly being shown, it is not even being looked on online according to my website.  I am frustrated with the listing because he has a really nice house.  As they say, location, location, location.
Feb 28, 2008 02:20 PM
Lou Farris
Your Castle Real Estate, Inc! - Highlands Ranch, CO

MAria,

Sometimes, when I run across this problem, I run the listing way below market to generate interest, and then once the traffic and interest start up, raise the listed price, adn create a market for the home. I try to use items in the home to help the client stage their property carefully, to create a flow through the home, that keeps people looking a tte dimensions of the room, and the possibilities for the property.

Otehr things I do are create interest cards, shich, if I hae a dining room table, will set as place cards, on place settings at the table. People see suggestions about the rooms in the house, and features that will make it comfortable and fun to live in the house, and then i direct them to consider, say... soaking in the oversized tub at the end of a long day, relaxing in the spa, being able to entertain in a comfortable and gracious manner, etc.

I place similar cards in the areas I am directing the clients to, and sometimes create things like house "Menus" for successfully lving in their new homoe, or "housewarming party" invitations for brochures, business cards with thumbnails of the home, and other materiasl produced on my office printer to specailly showase the home.

The business cards are tacked up everywhere a woman shops or normally visits: spas, rec centers, library, grocers, salons, home centers, childcare centers, etc. because that will provide the greatest exposure.

 Hope this helps. 

 All the best,

Lou Farris, MBA, Realtor

Global Realty Marketing  303.683.4603

http://ck2457.wlgweb.com

Feb 28, 2008 02:45 PM