How close to asking price are homes that are either short sale or foreclosed selling for? I

Asked by Sandi, Barrington, RI Wed Jun 29, 2011

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7
Nicole Bailey, Agent, Seattle, WA
Tue Apr 10, 2012
The shortest answer to this question is that short sales will tend to sell close to the "Market Value" meaning the price of other similar homes sold in the exact neighborhood in the last two-three months.

Foreclosures are at a higher risk of blight and cost the bank money every month they stay on the books. Most banks will try unload them as quickly as possible for less than market value depending on condition.

Surprisingly, the spring market has brought competition to the market, so my advice is that if you see a home that meets your needs and is in your price range, write the offer you feel best represents your "highest and best."

Good luck!

Nicole
1 vote
Fatima Finam…, Agent, East Greenwich, RI
Thu Dec 29, 2011
How close to asking price are homes that are either short sale or foreclosed selling for? I am a Real Estate Broker in Rhode Island and in Florida. Also a Licensed Mortgage Broker in Florida. I am able to see the market from various points and will tell you REO properties are typically priced below appraised or assessed value to generate a lot of activities and get multiple offers to be able to choose what's best for them depending on the lender. For example Bank of America will have a different agenda than, let's say, Fannie Mae. In most instances they are prices just below market by 5 to 10 percent. Most often these homes are in need of major repairs. Short sale on the other hand will depend on the listing agent expertise and knowledge and the seller being in a point of acceptance that the home must be sold. When the seller is in denial or emotionally attached to the home they will not accept an aggressive pricing from the beginning. If the agent is very experience they will take the time to explain to the seller the options available and if short sale is the best option to meet the sellers goals then by educating the seller(s) they will price it well below market value to present an offer tot he bank to get the bank to give you an acceptable price to them and allow you to market the property as "Bank Approved Price" which takes the fear out of the buyer. I have seen too many short sale properties on the market go into foreclosure because they were not priced aggresively to get an offer to the bank. It's my opinion a lender will prefer to sell it in a short sale than to foreclose. SHORT SALES are more complex but could give you a better deal overall not just on price but also on the condition mostly due to the fact most often short sales are owner occupied and the home have been maintained, and quite ofter totally renovated. Fatima A Finamore, GRI East Greenwich, RI
0 votes
Matt Patty, Agent, Warwick, RI
Thu Jul 7, 2011
Short sales and foreclosures are different animals altogether. One advantage of a short sale versus a foreclosure is that the buyer will recieve a full warranty deed with a short sale but not in a foreclosure. However, the advantage of a foreclosure is that the property owner is the bank and they can accept or reject an offer immediately, so you can usually close in a normal time frame, assuming there are no issues with the title search. Usually, for investors, foreclosures are the way to go but for occupants they can be too much risk and you're better off looking at conventional sale or if you can wait for one, a short sale.

As far as list to sale ratio is concerned on foreclosures often banks are getting asking price or in many cases over list price. They list them right and drive the bids up in order to generate multiple offers and sell in a short time frame. Honestly, conventional sellers could learn a lesson about pricing property from the banks, because by listing them right, banks are often able to get more money for the property then they would've if they started high and reduced several times.

On short sales, sometimes the lender will give the sellers an approved short sale price and depending on that lender, won't take a penny less than that price. Other times you can negotiate for a better deal. A key factor in determining the likilihood of a bank being wiling to negotiate is how long the property has been on the market at the price its currently listed for. Shorter time on market gives you less negotiationg room. Longer time to market and the bank will probably listen to reason. Negotiating in short sales really depends on the lender and their underwriting standards. Each lender is different and some are easier than others to work with on short sales.
0 votes
George DeVine, Mortgage Broker Or Lender, East Greenwich, RI
Fri Jul 1, 2011
Sandi,

As previously stated, every situation is different, and you'll be better served by working with a local agent who has local knowledge. That being said, short-sales and foreclosures are likely already priced agressively, so I would set your expectation at somewhere around 90-95% of asking price. I'm a native of RI and have many year's experience working with real estate agents. I'd be happy to refer you to a good agent. I would also appreciate the opportunity to assist you with financing, if needed. George DeVine 401 301 0130.
0 votes
Bill Eckler, Agent, Venice, FL
Wed Jun 29, 2011
Sandi,

There's no way to accurately answer this question. In some cases the actual sale price is higher than the asking price while in others it can be considerably less. Whether or not the sale price is above, below, or on the nose depends on a number of factors including the local RE market, the lender, debt associated with the property, amount of time the property has ben on the market, condition of the home, etc.

We strongly recommend working with and through a local real estate professional that knows the local distressd market sales activity. They will be able to guide you through the process step by step and advise you.

Good luck,

Bill
0 votes
Shanna Rogers, Agent, Murrieta, CA
Wed Jun 29, 2011
Hi Sandi,

That depends on if the seller has the property priced too high (hopefull short sale seller) or too low (either short sale or REO seller - to start a bidding war). The best way to know how to price an home or to know how much to offer for a home is to have a Realtor do a Comparative Market Analysis (CMA) using Sold comps within a 1 mile radius of the property (the closer, the better) that have sold within the last 3 months. This will give you market value of the property.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes
Phil Rotondo, Agent, Melbourne, FL
Wed Jun 29, 2011
Sandi;
A local real estate agent will be able to tell you the list-to-sale ratios for homes in your area.
Web Reference:  http://www.321property.com
0 votes
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