It is difficult to avoid the subject of short sales and foreclosures when discussing real estate these days.
We receive ongoing emails and calls from people wanting to buy short sales and foreclosures because they want the best deal possible. They believe that the best buys can only come from bloodied sellers and lenders and that somehow real estate agents are the best bloodhounds of all (which is often true).
Theres this misconception floating around that if a lender is willing to shave off some of the debt owed on the property and sell it for less than what is owed, it must be a good buy. The same logic is also applied to foreclosures.
But reality sometimes paints a different picture.
Many of our San Diego clients have been able to get outstanding buys on real estate not through short sales or foreclosures, but from the best kept secret of all:
Motivated sellers.
And it makes a lot of sense. If, as a savvy real estate agent, I decided to sell my own home in todays market at the best price and within the shortest time frame possible, I would:
1. Stage the home.
2. Price it 3 to 5 percent under the competition. (Hear that, Freakonomics?)
In short, I would compete with any short sale or foreclosure competitors in pricing because I can, and thats because I have enough equity in my home to do so. There are also more sellers in my position than those who are in over their heads.
Hence, it makes good sense to work with a Realtor who is in tune with seller motivations and local market conditions and who keeps an ear to the ground to hear market rumblings as well as occasional agent gossip that doesn’t appear in MLS descriptions.
In times like these, working with a knowledgeable and wise real estate professional may be one of the best investment decisions you could make. And when looking for the best buys in real estate, pay attention to short sales and foreclosures and look even more closely at seller motivation.
Read also:
Short Sales in the Luxury Home Market
Real Value in Real Estate Gossip
This is some pretty sage advice Roberts. Why do so many sellers have difficulty understanding they will get more by asking for less at the initial listing?
Keith: Perhaps they are afraid of leaving something on the table–and don’t understand that it is THE MARKET that determines pricing–even with ultra-luxury properties.
Sometimes it is the seller who loves THE MARKET, and sometimes it is the buyer.
Sandy: The short sale is certainly an alternative to foreclosure, but it certainly doesn’t guarantee no damage to a client’s credit rating. In fact, it can be equally damaging. That is one of the areas that must be negotiated with the lender.
An agent can never guarantee a clean exit via a short sale. Homeowners should be wary of anyone who promotes short sales as an easy and no-risk exit strategy from real estate ownership.
I am a broker here in California. It is so refreshing to finaly hear someone with intelligent and correct information. If we continue to give the correct information enough times maybe someone will listen. thanks great service and we will change the market even if the government is against us….. just a personal observation. 🙂