By: Katie Kirk-The Kirk Holton Team
So often buyers call to tell me that it is time to buy and that they want me to send them information on short sales and foreclosure properties. At this point, I begin by asking why it is that they want to look only at these types of properties? The answer of course is because they think they will get a “deal.” It is important that we then begin the discussion about what they define as a deal.
Short sales and foreclosures have grown to comprise roughly 30% of the homes sold in today’s market. Buyers need to know that it is not always these types of properties that offer the best discount.
Keep in mind that when dealing with a foreclosure or short sale you are dealing with banks that are trying to recoup as close to possible the current fair market value of the homes they are trying to sell. These properties are often already priced to sell. A traditional seller may price higher than market value to see if they can get someone to bite. Banks want these properties off the books sooner, than later. Therefore list price is usually priced to sell. Some banks even have a rule of rejecting offers more than 10% below the list price.
So let’s take a look at a different category of sellers that might be more motivated, and in the end leave a buyer feeling like they got a “deal.” Who are the motivated sellers out there? Often times they are people who need to sell…moving out of state for a new job, new addition to the family on the way…people who are emotionally invested to sell. Banks as sellers lack the emotional component. Combine this with a house that has a history of being on the market for several months (high DOM-days on market) and you add to the level of motivation.
In the end, buyers should NOT limit themselves to just foreclosures/short sales. Find the motivated seller, who is emotionally invested to sell where the home has been on the market for a while. Chances are with a good Buyer’s Agent you can negotiate a sale and feel great about your purchase. Good luck!!!
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