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Ben Johnson's Blog

By Ben Johnson | Agent in Wayzata, MN

What to Expect as a Buyer: Traditional Seller v. Bank Owned v. Short Sale

The raw numbers first, simply put below, homes for sale in the Twin Cities market compared to homes sold in the past year, broken out by type of seller (to the nearest 100, as of October 2011, sources Northstar MLS and MPLS Realtor Association):

  • Traditional Seller: 14,100 Active listings currently; 22,000 closed sales in the past year.
  • Bank Owned: 2,300 Active Listings; 13,600 closed sales.
  • Short Sale: 4,700 Active; 4,200 closed.

The quick interpretation of what to expect as a buyer...

There are about 1,800 Traditional Sales per month compared to the 14,000 listings, meaning 7-8 months of inventory.  Expect the buyer's market you should expect. Prices are negotiable and the amount comes down to level of motivation.  Closing cost and inspection concessions are common.  Buyers can usually dictate the closing timeline within reason.

Bank Owned properties are selling at over 1,000 per month but with only just over 2,000 listings.  Expect competition.  Multiple offers are common, sales above list price are not uncommon.  Prices are negotiable but pretty strictly as a function of time on market (more time equates to reductions or discounts).  As-is clauses, no repairs, narrow windows of acceptable closing dates all prevail with most bank's 'my-way-or-the-highway' general attitude as a seller.

The Short Sale category shows more properties currently for sale than have closed for the entire previous year.  Expect not to close. Anything can happen in this category, logic frequently falls prey to bureaucracy and conflicting interests, and it's difficult to generalize.  It's quickly evolving however, and we can help you identify the more saleable scenarios.  Buyers still need to hope for the best while planning for the worst.

It goes without saying that every situation is unique, so take these expectations for the broad generalizations that they are.  A perfectly priced traditional seller may fit the competitive bank-owed description, an over-priced bank owned may be the opposite, and some lucky buyers will close on a short sale with no issues.  An active and experienced agent is your best source for determining what to expect one property at a time, REMAX Results has a lot of those!

Ben Johnson 612.812.1146 Ben.Johnson@Results.net www.realEnation.com


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