The CityRidge Blog » Selling

When Home Foreclosure “Right Price” is Not Correct

admin — Mon, 19 Oct 2009 23:37:41 +0000

No doubt, Foreclosures are the hottest properties in the market. Within seconds of being listed in the MLS, multiple beyond multiple offers are submitted to the listing office. The following article “Home Foreclosures: When the Right Price is Not Correct” by Bob Schwartz from Realty Times, brings good insight to all parties with dealing with Foreclosure properties.

The San Diego housing market is once again hot! Selling quickly and at above listed prices are the bank-owned foreclosure properties, both detached homes and condominiums. Alan Greenspan’s term “irrational exuberance” is once again characteristic of the San Diego home buyer’s behavior. Any property description using “bank-owned,” “lender repossession,” “foreclosure sale,” etc., is drawing a crowd to see the property. If the property is in decent condition, there will be offers and multiple offers, at that.

Sounds like déjà-vu? Not quite. Adding my observation to the above facts, a number of lenders have hit on a marketing ploy to create a buying frenzy which guarantees an almost instant sale. In the majority of cases the offer(s) exceed what may have been realistically expected if the property was marketed the traditional way.

Here are some actual examples of this technique for San Diego home sales.

Example 1: On 4-8-09, a bank owned home in east Carlsbad was listed at $499,900. Based on the location, age and size of the home, I estimated the current value at $575,000 to just over $600,000. Within one day of the listing, the listing agent had multiple offers. According to the agent, the lender required it to be on the market one week before they would look at any offers. The agent speculated that based on the number of inquires, she would have 40 to 50 offers in the one week period. This home sold for $597,000. The sales price was almost 20% over the listed price. Doesn’t a sale of $97,100 over the listed price suggest that it was listed way under the market?

Example 2: A bank-owned Little Italy one bedroom condominium was listed in March for $234,900. The estimated fair current value for this condo was approximately $275,000 to $280,000. The listing agent stated that within 3 hours of the MLS listing being submitted, he had an offer. Again, the lender would not look at any offer until the condo was on the market one week. This San Diego property generated 21 offers within the 1st. week, of these, 11 were at or above the $234,900, listed price. This Little Italy condo sold at $295,600, or $60,700, approximately 26% above the listed price! I was told the accepted price was $15,000 above the next highest offer.

Example 3: A San Carlos planned-unit-development, bank-owned 4 bedroom was listed at $344,900. The estimated fair value for this condo was approximately $410,000 to $425,000. Inside of one week, this San Carlos property had an accepted offer at $410,000. This was approximately 19%, or $65,100, above the listed price! Banks are purposely under listing property with the strategy of creating a buying frenzy to result not only in a very quick sale, but, a sale at or above the fair market value. Is this practice fair or even legal? It is on both counts. If the bank does not list it properly, they could end up with a sale way below the current fair market value.

On the other hand, it isn’t fair to neophyte buyers/agents. Buyers and/or their agent who do not recognize the ploy, may be wasting quite a bit of time writing offers that in some cases, will not even be considered or countered. Also, what about shattered expectations? A number of buyers/agents may honestly believe that their full price offer has a chance of being accepted. In reality, they not only have zero chance of getting their offer accepted, but in the majority of cases, they will not even get a counter-offer.

This is not the time for buyers to be represented by neophyte agents. Bargains are available and buyers can position themselves to be one of the lucky ones by selecting an experienced agent familiar with the areas in which they are interested. A good agent will have reasonable advice about structuring offers and which properties are worth the work and wait. Follow that advice!

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Make Your Home Stand Out: Easy, Cost-Efficient Methods for Prepping Your House For Sale

admin — Tue, 01 Sep 2009 01:35:46 +0000

You want to sell your home, but you keep hearing about how hard it is to sell a house in today’s market. How do you ensure that your house stands out in the crowd?

There are several things you can do to make sure potential buyers see the great things about your home. It’s not necessary to spend lots of time or money on prepping your home. Instead, try these easy, cost-effective tips for prepping your house for sale:

Depersonalize. Pack away personal pictures, items on the fridge, and anything that’s personal to you but may not matter to someone else. Potential buyers want to visualize themselves living in this space. That’s difficult to do with pictures of another family dominating the walls.
Declutter. Clutter can make our spaces look messy, disorganized, and smaller than they are. Pack away all unnecessary items, including knick-knacks, unused appliances, extra books and magazines, and anything else that might be just sitting around taking up space. It might be a good idea to declutter the space, then have someone else – a friend or relative who doesn’t live in the house – come in and give you ideas on how you can do even more decluttering. We sometimes become immune to our own messes and don’t see all the things that could be put away.
Take out extra furniture. Too much furniture can create the illusion that a space is smaller than it actually is. If necessary, rent a storage unit to store your furniture until you move.
Paint. A fresh coat of paint is an inexpensive and easy way to freshen up the look of your home. Use neutral, light colors to create the illusion of bigger spaces, especially in small rooms.
Clean the carpets. Your carpet may not be in the best condition, but deep cleaning it will make it look better. If you can’t hire it done, rent a steam cleaner from your local retailer and shampoo them yourself.
Don’t ignore those hidden-away places. How many times have you shoved clutter into a closet or cabinet when company comes over, just to quickly clean up the mess? Potential buyers will be looking in all corners of the house. Be sure to clean those easily forgotten areas, including the garage, the basement, and all closets and cabinets.
Clean, clean, clean. As difficult as it is to keep a house “show-ready,” it’s even more difficult to sell a house that is dirty or dingy. Make sure all floors are swept, counters are wiped out, and bathrooms are sparkling.

Let’s face it – selling a house is hard work. However, you can create better odds that your house will sell if you follow these easy, inexpensive methods for creating an enticing environment for potential buyers.

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Close Escrow In No Time!

admin — Mon, 13 Oct 2008 21:41:53 +0000

It’s no surprise that in today’s market, many listed homes are having problems closing escrow. Sellers need to know that the traditional way of buying homes are long gone…at least for now. They need to be aware of key factors regarding the market if they want to sell their home quickly. Otherwise, expect your property to linger around the market for quite some time.

The number one factor in selling your home successfully is pricing your home accurately. Many REALTORS® can help sellers determine a fair market value for their home in order to list their property with a proper price. REALTORS® will pull up comparable properties within the neighborhood that have been sold from the previous three to four months. The market continues to fluctuate from each neighborhood, that’s why it’s crucial to stay current with recent sales and accommodate with the market demands.

Sellers, do have some control with contingencies. Buyers sometimes request their contracts to contain contingencies based on obtaining a loan. So in order to avoid these possible setbacks, requesting buyers to provide a pre-approval letter from a lender is more efficient. This proves that the buyer is likely get approved for a mortgage loan. However, make sure that their pre-approval is current and not past 90 calendar days.

Many buyers try to take advantage of the home inspection report to negotiate a lower price. Sellers usually offer the buyer some money for the repairs needed rather than the seller repairing each item that has been listed on the report. But it may be wise for the seller to have the home pre-inspected before listing their property to avoid paying a lump of sum to the buyer. This allows the seller to get a proper estimate for their costs and repairs in advance.

Sellers who list their property in a slow or competitive market need to understand the market conditions. Buyers today are wiser and very picky about where their money is going, and they’re always looking for ways to find a good deal on houses. Sellers don’t have to struggle though. Just be as smart and realistic about your property in its current market, and with a help of a REALTOR®, you’ll see your property close escrow in no time.

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