Combating Foreclosure And Short Sales
Not every area has a flood of homes sold in short times or by banks. If your area has a lot of these types of sales, you do have a problem. How do you compete? The biggest concern is pricing. Bank-owned homes will be connected directly to yours. How can you compete when the home you’re are trying to sell has equity now, but was bought when the prices were inflated.
Pricing will be your greatest tool when trying to combat foreclosures and short sales.
Finding the perfect price for a home surrounded by foreclosures and short sales takes science, emotions, and cold hard facts. The price of the home needs to be looked at from the view point of the buyer as well as the seller. Even if you know the price should be higher, the buyer and yourself need to agree. The prospective buyer won’t bite if you don’t agree.
There are three things you need to keep in mind. How much more is your home worth than the price it needs to sell for right now? What would make an appraiser value your home higher than the surrounding distressed homes? Then, why would a buyer choose your home over a distressed home sale?
Unfortunately appraisers do not give any significant allowances for upgrades that you have put into your home. When homes are priced so low the buyer may choose a home that needs upgrades over yours because even when they put in the improvements needed the price is still better. The almost sure sale happens when your home has the higher value with the upgrades and is still priced within the same range as the distressed homes. A buyer will not pay more for any home than what they can get a distress home for plus improvements. That will be their highest price.
The perfect selling price:
You must compare apples to apples, because comparing apples to oranges will not work. Carefully consider all the homes that have sold in a time frame of about three months that are in the general area of your property. The homes should also be in comparable neighborhoods. A factor is location. Comparing one story houses to two story is comparing apples to oranges. The age of the home will make a difference as well. A bidding war might be the result of an extremely good price.
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