So You Want to Buy A Foreclosure by Sue Hilton
In the climate of today’s real estate market, both short sales and foreclosures have become part of our business landscape. To better help the public understand each I would like to offer an explanation of the differences as it impacts our community. A short sale is a term used when a property is negotiated as a sale and the mortgage company agrees through direct negotiations to “take less than is owed on the note.” This process has taken on tremendous strength in our market and certainly effects the local consumer with regards to property value. A foreclosure is the actual process of the bank taking the property back from the borrower, including an eviction of the owner, and processing the sale through various entities to secure a new homeowner. Each process affects local values and offers challenges to homeowners who simply wish to sell their home in this market. In recent years, say 3-5 years ago, homeowners did not feel the impact when a home foreclosed in their neighborhood. It was easy to say “that was just one foreclosure which isn’t typical for our area.” Short sales and foreclosures were a rarity in that climate and have now become much more of the norm.
New construction developments have been hit especially hard in this market. With builder dollars drying up, many developments have been taken back by the banks and in return placed back on the market at substantial savings. This in turn impacts resales in the area as many consumers choose to buy a new home at a deep discount over an existing property with limited negotiating room.
In our current market these transactions impact each and every development throughout our area. The unique opportunity here is that as each property transacts, lending criteria and borrowing power are more stringent, interest rates are now tied directly to credit score and for every property closed, the market begins to normalize. My advice in this market to any consumer: Buy, Buy and then Buy Again! Never in recent history has the climate been more favored to investing in real estate. With interest rates and prices being at historical lows, investing is not only a logical choice, it’s a smart one.
Additionally, the move-up buyer is seeing significant gains in equity by choosing to sell their existing home, even if they receive less than expected, while gaining tremendous savings on the larger home. Proportionally there is an inherent value from this type of transaction. In Cobb County, specifically in FMLS areas 73, 74, & 75 which translates into all of the Smyrna/Cumberland area through all of the West Cobb corridor and into Acworth. The average days from going on the market to a pending sale is 103 and the average sales price is $186,523. The binding contracts are closing at approximately 94% of list price according to FMLS statistics.
The moral of the story is, if you are wishing to sell your property, use a seasoned agent with detailed knowledge of this market, price your home ahead of the curve and have your home professionally staged. The statistics prove that we must be in the top third in appearance/value and the bottom third in price to attract a buyer. Also, be prepared to negotiate with regards to pricing and closing costs. Never be offended by an offer, simply respond within market range and ideally the transaction will work out.
Homeowners desiring to sell at the top and buy at the bottom are finding frustrations in getting their properties under contract with a viable buyer. The “deals” to be had are selling daily. We have seen a tremendous increase in multiple-offer situations with properties that are priced well and staged.
About the Author: Sue Hilton has been in business for 19 years. She has been with Keller William Realty Signature Partners for the last six years. She has extensive experience with foreclosures and short sales. For detailed information on your home’s current value or to have assistance with buying or selling a home in the West Cobb area, you may contact her at 678-631-1713 or email@example.com. Visit her website at www.suehilton.com
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