Crowded foreclosure

By
Real Estate Agent with Long & Foster Real Estate

 

I wanted to share a recent experience that I think demonstrates  some of our current problems with this market.  The other day I was showing a bank-owned townhouse selling for $239,900 in a very nice newer subdivision in Frederick.  There are 10 similar homes in this development that are on the market for $270,000- $300,000 there.  (Whoops, I almost said "selling for $270,000-$300,000".  Nothing's selling.)  A year ago, they were selling in the mid-$300,000s.

Something happened that hasn't in quite a while.  There were actually two other Realtors showing the same property to two other families at the same time!  Remember the good old days? It was,  needless to say,  a little crowded.  Three realtors, three families with children in tow. 

Unfortunately, the townhouse was in pretty poor condition.  It needed carpet and paint throughout, holes repaired, vanity doors replaced, railing repaired. etc.  It seems that people not paying their mortgage tend not to maintain their homes very well.  A small investment in new carpet and a few days fixing up would turn this home into a real gem.  Unfortunately, none of the buyers could see past it's present state. Mine said he didn't even want to think about the work involved.  No one has made an offer on this home and it still sits and sits and sits.  Sad and neglected. 

All these foreclosures are adding to an already huge inventory, 14 months in my local market.  Buyers have to look at them in hopes of getting a good deal and are then disappointed in the condition of these houses. But they have to work through them and eliminate them before they will consider  paying market price for a home in good condition.   Our buyers have become spoiled and accustomed to home builders and Realtors showing them houses in pristine condition with no extra work or investment required. 

As Realtors, we need to explain this situation to our customers and clients, buyers and sellers alike. Until the market corrects itself, we need to manage their expectations and expect to show a lot more houses.

Rick

Comments (7)

Melody Botting
Broker Associate PenFed Realty - San Antonio, TX
You Deserve The Best
I have been running into other Realtors while showing as well.  I am running into properties already being under contract even though MLS says Active.  I am not saying we have a great sellers market but it isn't as bad as the media claims.
Apr 26, 2008 01:50 AM
Pam Joffe
Solaris Realty - Tampa, FL
Good morning- You are right that the foreclosures are getting crowded, but that is good, means the market is picking up.
Apr 26, 2008 02:07 AM
Scott Barr
Pacific Sotheby's international Realty - Newport Beach, CA
Realtor

There has been a shift going on in the market. People are buying. Its normal marketing principles taking place. Ther is a segement who are the first to spot a trend and they jump in. Then there is the second group who pull the trigger and throw thier hats in. Then the third so on and so on. My point is we are seeing the first group coming back to the market. 

Apr 26, 2008 02:09 AM
Crystal Ledbetter
Texas Home Group - Montgomery, TX
The problem i see with the foreclosures and buyers is that have to "get it" that the bank does not want to paint and repair and or any sellers concessions, the banks want to move it as is and the buyers want a pristine living condition home, you dont get the bargins without a little sweat equity,
Apr 26, 2008 02:17 AM
Gary McAdams
GMAC Schwartz Property Sales - Key West, FL
Having more than one showing going on at the same time can get very crowded but I love it.  It puts a sense of urgency on the sale.  If the buyers think there is rush they will take their time and in most cases fade away.
Apr 26, 2008 02:20 AM
Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen
Our market is thrumming here in the TriValley. There are a large number of first time buyers and move up buyers. We're seeing multiple offers and homes like the one you referenced selling above asking price.
Apr 26, 2008 02:28 AM
Joe Virnig
RE/MAX Gold Coast REALTORS, Ventura County, California - Ventura, CA
No Ordinary Joe
There is a ton of activity in my market right now.  Some REOs are selling for well over asking.  And some sellers have made the adjustment to lower prices and their are some nice homes for sale that are priced right.  Buyers focusing only on REO's are missing out on some great homes.
Apr 26, 2008 03:21 AM