Beyond the Distressed Sale

Today’s real estate market is a serious challenge … to say the very least. In California, just as we are spoiled by the beautiful sunshine and good weather, we’ve also enjoyed rising property values and a booming real estate market for decades.

But the black clouds moved into our picture-perfect market in 2007 and while we’ve seen some small patches of blue sky, the storm is not over. So what does it all mean if you want to sell your home? 

One of the biggest challenges in today’s market is faced by the “equity seller." The equity seller is one who has to move or has decided to move and now must compete with bank-owned foreclosures and short sales. Is it possible? The simple answer is yes!

Everyone wants a "deal" in today's market but "distressed" doesn't always equal "discounted." Sometimes a standard sale can be a better deal and the "distressed" sale can cost you more than you bargained for. Short sales and foreclosures now make up close to 50 percent of the homes sold in today's market. The average sale price of foreclosed homes was 32 percent lower than the average sale price of non-foreclosed homes, at last count. However, it's not always the case that foreclosed homes or short sales offer the buyer the best discount.

With so many distressed properties and homes with depressed values on the market, in many areas, the individual, non-distressed home sellers who are putting their homes up for sale right now are those who are very motivated to sell. And they are more likely to be flexible with a buyer on everything that is negotiable, from contingency and escrow periods, to price, repairs and even personal property included in the sale.

Because most “distress” sales are exactly that, it’s critical that the equity seller have his home in tip-top condition. When buying a distressed property you can encounter all types of unknown repairs and for some buyers it’s simply not worth it. There are still plenty of buyers that want to purchase a house that is fully upgraded, clean as a whistle and ready to move into. This is where the equity seller has a huge leg up on their competition.

Long story short: You can sometimes negotiate a better deal with an individual seller on a standard sale than with a bank on a distressed home sale. So, don't limit your search to foreclosures and short sales, if you're looking for a good deal on your next home.

More than ever before, hiring the right real estate professional, who is trained and experienced, to represent you is critical to make sure that your best interests are protected.