It is difficult to avoid the subject of short sales and foreclosures when discussing real estate these days.
We receive ongoing emails and calls from people wanting to buy short sales and foreclosures because they want the best deal possible. They believe that the best buys can only come from bloodied sellers and lenders-and that somehow real estate agents are the best bloodhounds of all (which is often true).
There's this misconception floating around that if a lender is willing to shave off some of the debt owed on the property and sell it for less than what is owed, it must be a good buy. The same logic is also applied to foreclosures.
But reality sometimes paints a different picture.
Many of our San Diego clients have been able to get outstanding buys on real estate not through short sales or foreclosures, but from the best kept secret of all:
And it makes a lot of sense. If, as a savvy real estate agent, I decided to sell my own home in today's market at the best price and within the shortest time frame possible, I would:
1. Stage the home.
2. Price it 3 to 5 percent under the competition. (Hear that, Freakonomics?)
In short, I would compete with any short sale or foreclosure competitors in pricing because I can, and that's because I have enough equity in my home to do so. There are also more sellers in my position than those who are in over their heads.
Hence, it makes good sense to work with a Realtor who is in tune with seller motivations and local market conditions-and who keeps an ear to the ground to hear market rumblings as well as occasional agent gossip that doesn't appear in MLS descriptions.
In times like these, working with a knowledgeable and wise real estate professional may be one of the best investment decisions one could make. And when looking for the best buys in real estate, pay attention to short sales and foreclosures, but look even more closely at seller motivation.