I read an article today that said over 35% of all sales reported in 2010 as a retail sale were either a short sale or a foreclosure. So, how do you keep your home from falling into the second category? Selling a short sale is not as easy as everyone wants to think they are. It takes a lot of work on the Real Estate agents part to make the situation work and the seller to ensure that the necessary paperwork is there when they need it. After viewing quite a few short sales and negotiating my fair share of them on both the listing end and the buying end I have come up with my top reasons homes do not sell through a short sale and how to get a home sold through a short sale.
The biggest reason is PRICE. Pricing of the house correctly from the start is vital. If your Realtor is inisisting on pricing yoru home substantially below market value to start out with you have the wrong Realtor. There is an old adage that if it is to good to be true it probably is. Well that is no more true than in a short sale price. If the comparable homes in a neighborhood in the same condition are selling for $150,000 and you price your home at $99,900 certain things are going to happen. You are going to get a lot of traffic and most likely a few offers on the house. Then you are going to go through the process with the bank and put together a financial package to only find out the bank will not accept a penny less than $135,000 for the house. This will do nothing by upset the buyer. Which will lead the buyer to walk away. Now, you have lost valuable market time, and have to raise the price again to an acceptable number from the bank.
This will have multiple effects on the marketing of your home. First, it will show in the Charlotte Listing Service as a price increase. People are a little shy when in this economy they see prices going up and not down. Second, all the places your Realtor has the home advertised now show the home going up. So, people looking online will not even call or look at your house becase they feel you just increased the price. Eventhough, this price may be less than market value for the neighborhood and a good value it is perception....and you only get one chance to make a good first impression.
My recommendation and what I have done (I have closed over 90% of my short sale listings), is to price the home at fair market value based on the condition of the home. Keep a log of the price and the activity it gets. Every 30 days adjust the price down slightly until you hit a number that has increased the showings and interest in the home. At that point I realize I have hit what I call the wall. A point where the value of the house and the price are ata happy median for buyers. Then provide this type of evindence to a bank has a large impact on justification of your pricing to them. They do not want the house anymore than you want to lose it to foreclosure. And the value of the house is ultimately determined by what soemone will pay for it.
A fair deal to the buyer and the bank will get your home sold in a quicker time frame and benefit you the seller, buyer and bank......
Dave diCecco
Realtor/Broker
www.davedicecco.com
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