Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
When looking at sold comparables in a neighborhood of identical townhouses, are short sales considered to be the same as traditional sales? Example: 2 "traditional" units have sold in the past three months for $230K - $235K, and 1 short sale has sold at $210K.
I ask this because a buyer is placing offers and counter-offers on our identical townhouse based ONLY on the $210K. We have made two more- -than-fair counter-offers to him, and he doesn't seem to be willing to negotiate. Our agent agrees that we have been extremely reasonable in our negotiations and thinks we should walk away (to quote him: "he doesn't have a grip on reality/he isn't a serious buyer").
Your agent may be right if he knows your local market and has reviewed the comps. If short sales are a significant part of your local market, they need to be taken into account along with bank owned sales. They will affect prices. But if you also have 2 recent similar traditional sales at a higher price, then I'd give them more weight.
I agree. Short sales are only taken into account, like foreclosures, if that's a new norm in the neighborhood. If you still have the vast majority as regular sales, the regular sales will dictate the market.
Thanks for your feedback. The $210K unit is the only short sale in the history of the development, and my area as a whole has not been hit as hard by short sales/foreclosures as the rest of the country.
Example: 2 "traditional" units have sold in the past three months for $230K - $235K, and 1 short sale has sold at $210K.
These recent sales were contracted 30-60-90 days before the closing date and therefore, in some cases, might be as much as 6 month old.
Do you know with certainty, if any of these sales included seller assistance with closing costs and the amount? From a net perspective, this might close the gap.
Lastly, what's the current market trend, in your neighborhood, for townhomes which may not be the same as it is for other types of dwellings.
Only you can decide the value associated with the potential consequences, if this buyer walks away.
The two traditional sales contracted in late October and early November, both closed in December, and the $230-$235K numbers are the net sales (one included an assist). The numbers were pulled from the MLS by my agent. The $210K short sale went to "Pending" IMMEDIATELY after it was listed in November - like literally within one day - and just closed last week.
I'm all for negotiating and dealing with current market trends, but when I come down $10K from my asking price (which every agent and potential buyer has said is "fair"), and the buyer only comes up $1K from his initial offer (as his "best and final offer"), something just doesn't feel right to me. Especially when my agent said that the only thing his agent keeps mentioning is the $210K comp. Argh.
when I come down $10K from my asking price (which every agent and potential buyer has said is "fair"), and the buyer only comes up $1K from his initial offer (as his "best and final offer"), something just doesn't feel right to me.
The buyer probably came in with his offer as high as he could afford to go in the first place. That would explain why he was only able to go up another thousand. I wouldn't automatically assume he's trying to cheat you or refusing to compromise. If you're unhappy with his offer, turn it down.
It up to you as the seller. If you aren't motivated to sell and are willing to wait it out it's your decision. No one can make it it for you.
However, you need to consider the time your home has been on the market also. Is this your best offer to date? How long the home has been on the market?
Also consider how many homeowners who purchased at the peak of the bubble (in Philly it's probably late 2005-2007). Have your agent determine how many townhomes were sold during that time.
Why should you be interested how many homes in your development were sold during those times? Because many of those homeowners are sitting on timebombs (3-5 year ARMs, some of which could be interest only loans).
That means those loans reset this year and more homes will come onto the market by more desperate sellers.
I know from experience. I purchased at the peak in 2005 (actually those who purchased in 2006/7 paid even more than me). I lived in a new neighborhood in Maryland.
My nieghbor unloaded his home in 2008 at peak 2005 prices. I unloaded it in 2009, (lost six figures on the home).
Now it's 2010, guess what? Those people who purchased in 2005 have those 5 year ARMs resetting are now going even lower than the homes I sold last year so I would have lost even more money. In 2009, there was 1 short sale in my development. Now there are 5. It's just a crazy market, especially on the east coast where the boom went on a little later but have fallen dramatically after Lehman's Bros. Crash.
Short sales should definitely be considered along with traditional sales. Ultimately, the approving bank will order a BPO and won't let the house go for considerably less than fair market - so short sale prices should be considered as well.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
