Pricing A Short Sale Listing...Number One Mistake Made by Most Realtors!
Pricing a distressed property listing, and the subsequent price reductions (if needed), are the most important factors in selling a short sale home. The reality is that in most cases, a distressed home needs to be the lowest priced comparable property in the neighborhood. This is due to several factors, first, you have a limited amount of time to sell the home, second, you need to entice a buyer to make an offer and stay in the process for the 45-60 plus days that it is going to take to get an answer back from a bank. Generally, if a buyer feels like they are getting a "good deal" on a home, they will stay with the process.
As a Certified Distressed Property Expert (CDPE), there are five factors, in order of importance, that I consider when pricing a distressed property:
1. Fair Market Value
2. Time Left Before Foreclosure or Pre-Foreclosure
3. Area Days on Market
4. Property condition
5. What is Owed on the Property
Unfortunately, the average real estate agent looks at the short sale property and begins with the 5th item of importance on the list, determines what is owed, adds closing costs and commissions and sets the asking price for the home. Severely overpriced short sale listings can be seen in every subdivision throughout the valley on a daily basis.
Is Overpricing a Short Sale Really that Harmful to a Seller.....YES!
Remember that the clock is ticking if a client is behind on their mortgage. A CDPE knows how to do a thorough "Market Analysis," looking at all of the above factors in order to not only set a reasonable market price, but a price that the lender is willing to accept as well. A CDPE will not only educate a seller on pricing, but they will also educate the bank on local market conditions and show the bank why it is in their best interest to accept this short sale offer vs. letting the home go to foreclosure. Not only is a short sale better for a bank to accept, but it is better for a seller and their credit also.
If you are considering a short sale, please contact me today to receive my FREE brochure "Foreclosure vs Short Sale, Homeowner Consequences", a must have for anyone considering foreclosure, short sale, and even bankruptcy.