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Are there people who are willing to pay for the convenience of a regular sale in a market that is saturated with short sales and foreclosures?
We just went on the market last week. There are 8 homes that are currently active in our HOA, five of them are REO or short sales. We are the lowest priced non-short sale, but still priced above the others. Everyone who has looked at the house has said we have the cleanest and best maintained unit and all the agents have said that we're priced right.
We've already had one offer, but it was a truly insulting lowball which we countered and haven't heard a peep on in two days. I'm thinking she wasn't a serious prospect and am trying not to dwell.
Still, we're bringing cash to close since we're upside down on the mortgage and we're only listed 5k above our bottom line. Our exact same unit has sold as a short sale and a foreclosure in the last six months, one at $112 and one at $115. Are there buyers who are willing to pay $10k for the convenience of choosing their closing date and knowing it will go through (as much as anyone can know in real estate)? Or are we wasting our time?
it seems to me as though many in these forums think of shortsales and reo's as inferior for some reason. that simply isn't true. while there are some reos which have sat vacant, rotting away, they generally are homes like any other. if you want to draw a value, take the cheapest one on your street (shortsale, reo, fsbo or realtor). don't discriminate, because buyers won't beyond a couple of grand. add the amount of money it would need to bring the home up to the standard of your home, and there's your price.
unfortunately shortsales and especially reos (less hassle than shortsales) are your competition. it's not ideal but it'sjust the way it is right now
I have reconsidered the OP's original post. In my case, I am expecting to buy in the $600K-$700K range. In my price range paying $10K more for a smooth sale is not that big a deal. I think that if you are in the low $100K range though $10K is a lot of money (almost 10% of the purchase price).
I also think that most buyers in that range are more strapped for cash than buyers in the higher price ranges and that price is more important than anything. I am ok with buying a $400K house and doing $100K of repairs to get a house that will appraise at a higher value. When I was younger and just starting out though, that wasn't really possible.
So-I think that price matters more than anything at lower prices (anything under $250 or so).
it seems to me as though many in these forums think of shortsales and reo's as inferior for some reason. that simply isn't true. while there are some reos which have sat vacant, rotting away, they generally are homes like any other. if you want to draw a value, take the cheapest one on your street (shortsale, reo, fsbo or realtor). don't discriminate, because buyers won't beyond a couple of grand. add the amount of money it would need to bring the home up to the standard of your home, and there's your price.
unfortunately shortsales and especially reos (less hassle than shortsales) are your competition. it's not ideal but it'sjust the way it is right now
I don't think buyers see REOs as inferior, but short sales are another story. Short sales are proving to be nearly impossible to do around here (Fort Lauderdale area). People tell me stories of short sales that were still in process over a year after negotiations started.
To the OP, how much more are you priced above the other short sale or foreclosures. Forget about the non-short sales.
If there are 8 of the distressed properties on the market, THEY ARE your competition.
It appears you are still in a declining market if you have all those REO and short sales to compete with you.
I don't know about your overall financial health but if you are in a declining market, the longer you stay on the market the less you will likely get for your home. You need to be agressive in a declining market if you truly intend to sell.
So what's the spread difference between your home vs. the lowest short sale/foreclosure?
Current asking prices for the short sales and foreclosures range from $110,000 to $122,000 with one short sale at $89,900.
I should clarify that the bargain basement short sale is a small unit which appears to be in good condition in the pictures. The only units that have sold that low here have been completely trashed inside. That said, I have no idea what the financials are for that home so maybe it will get approved.
The lowest price comparable unit (same model, square footage) is $114,900 with no refrigerator/washer/dryer and has been empty for at least 6 months even though the short sale was pre-approved at that price in October. The other comparable short sale is $122,000, in good condition and is still occupied.
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