Dramatic House Price Drop? (bank owned, appointed, short sales)

[Xica_da_Silva]

So, a house I've been eye-balling online just had a dramatic drop in price...over $25,000 from 2 days ago!

Granted, it's a short sale and has been on the market for over 6 months, but what does this mean?!

Although I haven't been in the house yet(realtor out of town), I went by the neighborhood last week and it seems nice enough, and nosy person that I am I even peeked through the windows. It didn't look as bad as most foreclosures...it didn't seem a complete wreck! lol.

Maybe the huge tree in the front yard just collapsed onto the roof? Or are is the bank just now getting around to adjusting the price? What think the realtors or other experts here? Is this unusual to see such a sudden decrease in price?

[altus2006]

One thing I noticed with short sales is that the Realtor will drop the price dramatically before the house is to go into foreclosure in hopes that the house will sell before it is taken over by the bank.

There is no guarantee that the house will sell for that price as it is just a guess by the listing agent as to what the bank might take if an offer comes in.

There was an article in the paper not too long ago that talked about short sales and it said only about 5% actually sell before being foreclosed on by the bank.

altus2006

[Xica_da_Silva]

Thanks for your response, Altus. That makes sense. I guess I'll just have to get inside of it to see if it's worth the effort! I've seen so many dumps that look good in pictures...only to be disappointed once inside with all the upgrades that need to be done.

[yukon]

You might ask your realtor who they have covering for them while they're out of town. There's no reason for you to miss what could be a good deal because the realtor is on vacation.

[AZ Tracy]

If it's been on the market for 6 months with no offers....it was way overpriced! And, as Altus said, they could be getting close to the trustee sale date, so they need to get an offer so they may have a chance at getting the sale postponed.

[altus2006]

Originally Posted by Xica_da_Silva

So, a house I've been eye-balling online just had a dramatic drop in price...over $25,000 from 2 days ago!

Granted, it's a short sale and has been on the market for over 6 months, but what does this mean?!

Although I haven't been in the house yet(realtor out of town), I went by the neighborhood last week and it seems nice enough, and nosy person that I am I even peeked through the windows. It didn't look as bad as most foreclosures...it didn't seem a complete wreck! lol.

Maybe the huge tree in the front yard just collapsed onto the roof? Or are is the bank just now getting around to adjusting the price? What think the realtors or other experts here? Is this unusual to see such a sudden decrease in price?

After spending several months looking at homes before we purchased a foreclosure, here are my suggestions:

1) Stay away from short sales because too few of them actually sell and close and are a waste of time. There are too many foreclosures with firm prices to fiddle with the short sales.

2) If your Realtor doesn't leave you with a friend who can show you houses, find another Realtor. In this market your perfect house may show up on the morning hot sheet and you would be out of luck with no way to see it or find out about the new listing for that matter.

Keep looking because about 1 out of 10 of the houses are habitable without too much rehab needed (at least right off the bat).

altus2006

[andrzejn]

Originally Posted by altus2006

Keep looking because about 1 out of 10 of the houses are habitable without too much rehab needed (at least right off the bat).

altus2006

I agree with most of your points but I think the number is little low for number of homes habitable without too much rehab. If the home is bank owned its almost always clean inside. If not real estate agent didnt do his/her job in preparing the property for listing.

[MotleyCrew]

Originally Posted by andrzejn

I agree with most of your points but I think the number is little low for number of homes habitable without too much rehab. If the home is bank owned its almost always clean inside. If not real estate agent didnt do his/her job in preparing the property for listing.

We have been through a few and just got back from looking today and they are not always clean when bank owned.

[Boompa]

That is local. I follow several houses in various parts of the state. In the West Valley they have been declining steadily since the begining of the year. Unscrupulous Real Estates are trying to manipulate the forclosure market. Where I live a house identical to mine just sold for more than I paid three years ago.

[azaly]

I looked for a house for months and went through the drama of trying to buy a short sale before giving up and buying a traditional seller owned. Short sales require a lot of patience as it literally takes months for the bank to get back to you with an answer. If you can wait, and risk then being told "no," go for it.
Also, the big price reduction is because they have no offers and they are trying to price it so low it cannot be ignored. If the house is nice and priced like a bargain it can end up with multiple offers OVER asking price. Trust me, I lost several houses that were priced low but sold for WAY over asking. I bid full price and didn't have a chance. Short sales and foreclosures are gambles, you may win a great house at a great price, or you may spend a lot of time, energy and possibly money and lose. My best advice is see it ASAP, if you like it make your best offer, and if they accept it ask that they list it as pending instead of fishing for more offers, which they often do.
Good luck!