I just got done negotiating on a short sale listing. The listing agent offered the home for 35% LESS than the average home had sold for in that neighborhood in the past 90 days. It was over 40% LESS than the asking prices of the comparable homes in the area. So, the next questions is how much work did it need? NONE.
In today's market short sale and bank owned homes have become more prevalent than ever before in this country. So, what as agents are we doing to separate our homes form the competition? I have noticed a trend since the tax credit expired at the end of April. Less people are out looking at homes than before. This means we have fewer people competing for the same number of homes right now.
Banks can decide how much they want to sell a home for and lower their prices accordingly. When you look at a home listed for sale that si bank owned you can rest assured if you offer them that price and you are the only person with an offer at that time you will get an acceptance on your offer.
On the other hand, when you negotiate on a short sale the game is completely different. The sale price si decided upon by the listing agent and the seller. In most cases the asking price is fair market value for the home based on the condition of the home. However; what if there are no offers on the home? What if the seller is in danger of losing the home to foreclosure?
Then the listing agent will generally lower the price down significant enough to drive traffic to the home and get an offer on the home. But will the bank accept the offer? Depends on the price and the fair market value of the home. Each bank has their guidelines they use to determine what is an acceptable price to accept on a particular home.
Today, i have noticed many homes that are now priced as much as 40% BELOW market value. Knowing that the bank will probably not accept that number; the buyer still wants to put an offer in on the home. Then wait three weeks or longer (depending on the bank) to receive an answer back as to whewther they will accept the offer or not.
You could wait a month or longer to find out the bank wants substantially more than you originally offered for the home and are back to square one. Today, unfortunately it is becoming more the norm for homes to be priced low to attract an offer rather than get the home sold.
My advice is have your agent check the comparable in the neighborhood. See what they are asking for the home in comparison to what has sold. If it is too good to be true then chances are it is.... You now have lost a month or so from the market and your dream home may have come and gone in that time frame.
Dave diCecco
Realtor/Broker
www.davedicecco.com
No comments:
Post a Comment