If the house for sale in your neighborhood is a bank-owned home, but all the other homes for sale in the area are not, you don’t have much of a dilemma. However, if most of the homes that have lately sold in your area were bank-owned homes and short sales, you have a problem. That problem is you must contend with foreclosures and short sales to sell your home.
Your home’s market value is directly linked to distressed sales if those short sales and foreclosures rule the neighborhood.
Prior to the real estate bubble of the mid-2000′s, appraisers would often close their eyes to the distressed sales when appraising a home. Since then, appraisers pay close consideration to the amount of distressed sales that have closed and those presently for active for sale. What’s a normal seller with equity supposed to do to contend with all the distressed inventory?
How to Price a Home With Equity Against Foreclosures and Short Sales
Pricing a home is at best a blend of details, knowledge and emotion. It’s a mixture of wearing a seller’s hat and stepping into the buyer’s shoes. Think for a moment, does it matter much how much you think your home is worth, if a buyer disagrees? Attempt to answer these 3 questions:
- What would make a buyer buy your abode over a foreclosure or a short sale?
- Why would inspire a buyer’s lender appraise your residence for more than a foreclosure or short sale?
- In reality, is your home worth much more than a distressed sale?
You might be astounded by the answers. The truth is your home is not worth much more than a foreclosure, even if you added all the upgrades you could buy, if all the current sales are foreclosures and short sales. Appraisers don’t give a vast allowance for upgrades like they used to do.
Buyers seek out a good deal. They might buy a home that needs flooring and painting, for example, if adding the cost of new carpeting and a few gallons of paint, still makes that bank-owned home’s price eye-catching. On the other hand, if your home, with equity, is in first-class shape and priced within the range of distressed sales, a buyer is much more likely to choose your home.
However, say, a bank-owned home priced at $150,000 needs $10,000 worth of upgrading. If your home doesn’t need a penny of work, a buyer might offer only $160,000 for your home.
Let one of our Top Value Group licensed Realtors® show you the ropes and provide you with the best in information regarding your real estate intentions.