With close to 50% of sales reported resulting from a foreclosed or short sale property there is no denying this is one incredible market of opportunity. There are so many foreclosures and short sale properties creating a new lower market value that foreclosures and short sales are not the only perceived values in the market place. That's right, there are just as many desperate owner occupied sellers as there are banks unloading foreclosures. There are three owners fighting for your attention... foreclosures, pre-foreclosures (short sale), and owner occupied. What does this mean for you? An unbelievable deal!
Lorie, why did you say "perceived value"? So you noticed that I said perceived value when referring to foreclosures and short sales. I must get a call on a daily basis from consumers that want to buy a foreclosure or a short sale. When asked their reason for looking at foreclosures and short sales they inform me that they want a deal. Fantastic because a deal I can find them but the deal is not always a foreclosure or a short sale. Lets discuss!
What is a short sale? A short sale is a property where the seller owes more on the property than the property is worth. The bank has agreed to accept less than what is owed meaning they have agreed to a short sale. "Less than what is owed" is not always equal to a "great deal"! It can be a great deal but it can also be market value and not below market value. Short sales require a lot of patience as it can be 3 to 6 months before you have an answer from the bank. This does not allow you to lock in a rate with your lender or truly plan your move. So if you can handle the unknown a short sale might be for you.
What is a foreclosure? A foreclosure is a property that the bank has taken ownership of because the person with whom they gave a loan defaulted on the loan. In both a short sale and a foreclosure situation the bank has BPO's (Broker Price Opinion) performed to determine market value for the property in its current condition. Most short sales and foreclosures are sold as is and with no repairs. The banks look at all the facts and they price the bank owned property also known as a foreclosure at market value. If buyers do not bite then they reduce until buyers do bite... and their goal is to entice many buyers for a multiple offer situation so the price of the home bids up. That is great for the bank! Why do bank owned properties often appear to be a great deal? Banks are unemotional sellers. They are not attached to the property. They only look at the facts and the facts never lie. They know where to price a property and when to reduce. They appear a good deal because they are priced below the owner occupied properties that are overpriced! That's right, overpriced so the overpriced property makes the market priced property seem like a great deal. This all happens right under the noses of owner occupied listings while the owner occupied listing swears their home is worth what they want for their home even though buyers are not bringing offers...and perhaps are not even looking at the home because they do not see a value for the price. In addition, usually a homeowner who could not afford to pay their mortgage could not afford to upkeep the property so that bank owned property could require repairs uncluding cosmetic repairs. Because so many of the homes foreclosed on today are fairly new and in some cases new there are bank owned properties that are move-in ready... more so than ever before! Just as with short sales, a bank owned property may or may not be a great deal. And there are different foreclosures in the market place... some have perks!
What is an owner occupied seller? An owner occupied seller is a property that is not a foreclosure or a short sale meaning the owner is current on their mortgage and still living in the home... or in some cases has already moved before the property was sold but they are still the owners on record. You heard me talk about these properties being overpriced above and that is because in today's market 75% of the properties are overpriced. This explains the high rate of properties not selling. The buyers are there in the marketplace they just refuse to overpay for a home in todays market. With 75% overpriced that leaves 25% price aggressively to sell. These are sellers that are willing to compete with foreclosures and short sale properties. These sellers should not be overlooked... and quite honestly the overpriced listings should not be overlooked either. An overpriced listing, in my opinion, is a listing where the listing agent has either no clue how to price property or is too weak to tell the truth. The seller is the victim of this and sometimes an offer with supporting data brings light to the seller and a deal can be reached. Both with owner occupied and bank owned properties the closing date is scheduled at time of contract and the transaction is much smoother and a lot less stressful than a short sale property.
The bottom line is that this is the best market on record to buy a home. Prices are down significantly and rates are unbelievable. Don't limit your opportunities. Look at all the homes that fit your requirements, place multiple offers (you need an experiences agent to do this), and watch the sellers fight for your business! And by all means utilize the services of a top producing agent such as myself to negotiate you the best deal and the best terms so you are protected! You need an agent to show you how the homes price compares to market value so that you know when you are really getting a good deal and not just buying a home!
For all your real estate needs I hope that you will consider the Homes By Lorie Team for expert negotiations and professional representation!
Contact Lorie Gould
The Homes By Lorie Team
Keller Williams Realty Atlanta Partners
678-428-5841
Lorie@HomesByLorie.com
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