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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?
The REO's generally can close in about the same time as a non-distressed property, so you don't have an advantage there. Depends if it will cost the extra $10K to bring it into livable condition, then you may be on par.
Buyers are looking for bargains. If REOs and short sales are a significant part of your market and you can't price like them, you will be at a disadvantage. You may also have trouble appraising higher.
Me neither but I won't pay more for a non REO home than I would for a foreclosure.
I'm assuming you would adjust your value based on the condition of the home though? If the foreclosure has ratty carpets, no refrigerator/washer/dryer, smaller bathroom etc, would you be willing to pay more for a move-in ready home with new carpet, new laminate, vaulted ceilings and such?
the answer to your question is... yes, depending on where you are and what you are selling. I deal with those that will go for short sales and those who will have nothing to do with them. They all come from other areas and feel the value here is really kind of undervalued compared to where they are.
We are the lowest priced non-short
sale, but still priced above the others.
Are you saying you are the lowest asking-price, but
above the asking-price of the short-sale properties?
Priced to sell is priced lower than recent closing prices.
It could well be that the short sales priced currently at $115k
( you said this was a sold price, but not what they are listed for )
aren't going to be closed for more than $105k. If so, if you are
priced at $125k, you're not $10k over the short properties.
Almost 10% over for a non-short property sounds high to me.
Would someone pay $50k extra for a $500k house?
Current asking prices for the short sales and foreclosures range from $110,000 to $122,000 with one short sale at $89,900 that I don't believe will be approved. At least not at that price.
The prices I mentioned above were actual sold prices. The one that sold for $115,000 was listed at $125,000 as a short sale and the one that sold at $112,000 was listed at $122,265 as a foreclosure. The foreclosed home had no appliances and yucky carpets. The short sale was much nicer with all appliances and a fireplace.
As far as the current contracted listings, I know that my neighbor is doing a short sale on a unit smaller than ours and is under contract at $119,000.
I'm assuming you would adjust your value based on the condition of the home though? If the foreclosure has ratty carpets, no refrigerator/washer/dryer, smaller bathroom etc, would you be willing to pay more for a move-in ready home with new carpet, new laminate, vaulted ceilings and such?
I would be willing to pay more for a home in move in condition ONLY if I liked the new stuff that was in the house. The condition of the house plays into it of course.
I recently saw a home where the listing talked about the "fabulous Art Deco" bathroom. IMO that bathroom was a $50K remodel job because it was just so freaking UGLY (it was about 50 years old with little pink tiles all over the place). So in some cases, I would rather pay less for a house that was a mess and fix it up. The problem I am finding is that many homeowners with 30-50 year old kitchens and bathrooms are pricing their homes similarly to those with updated kitchens and bathrooms.
I actually don't mind buying a well priced outdated home and fixing it up. That way I get what I WANT instead of the upgrades the previous owners wanted.
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