Do short sales bring higher returns than foreclosures? Â Not always.
In a recent market report based on sold properties over the past 30 says, I had an interesting finding.Â In that report, I discovered thatÂ short salesÂ were selling at 84.63%Â of list whileÂ foreclosuresÂ were selling atÂ 91.42%Â of list.Â Of course,Â fair market propertiesÂ sold at higher rates, 95%Â of list.Â Â Short salesÂ sold at 7% below foreclosuresÂ in the past thirty day market.
I would have assumed thatÂ short sales were selling at list to sale prices above foreclosures.Â I certainly wouldn't encourage more lenders toÂ foreclose rather the allowÂ distressed homeownersÂ to go through a short sale, but the statistics in this area are surprising.
In an article on DSNews.com, "Short Sales Bring 24% Greater Returns Than Foreclosures," the writer uses the markets in Boston, Phoenix, Tuscon, Southern California and Southwest Florida to demonstrate the increase in income fromÂ short sales over foreclosures.Â What I can deduce from the article is thatÂ real estate is still local.
No matter what a market does in a different area of the country, all real estate is local.Â In some communities, real estate values are radically different neighborhood by neighborhood, and in some cases it is different street by street.
It's good to know national trends, but no matter what the national news says about the real estate market overall, it still boils down to each individual location.Â When you know your market's trends - you are better prepared to market in that location.Â You can also use your understanding of the local market to show your potential clients what they need to do get their house sold, and you can use it to help them understand what their potential return will be at the time of sale.
Will short sales in your market bring 24% more than foreclosures?Â Maybe.Â Is it a guaranteed national trend?Â Not at all.Â Â All real estate is local.Â Â Do short sales bring higher returns than foreclosures? Â Not always.