Thursday, September 17, 2009

Do Foreclosures Count as Comps When Pricing My Home? YES!!

One thing that I always bring with me to a Listing Appointment is, of course, a CMA (Comparable Market Analysis) to show the potential sellers what is currently happening in their area. The list incorporates current ACTIVE listings, any PENDING listings in the neighborhood and recent SOLDS in the neighborhood.

These last few month have show a dramatic increase in the SOLDS column of foreclosed homes. I am always faced with disheartened sellers who feel that their home is "automatically" better since it is not a foreclosure - surely it should be worth more that "those" homes.

Well, please read my good friend JL Boney's post regarding foreclosures and the effect they have on your home. Like JL has said, you may not want to hear it but it is the T R U T H.

Thanks JL for this enlightening and straightforward post!

Life in Wake Forest NC - educated sellers will prevail in today's market!

Via JL Boney, III Columbia, SC Real Estate (Russell and Jeffcoat):

So you've decided to sell your house and you are well aware of the fact that homes for sale in your community have involved foreclosed properties. All those homes that sold in the past 6 months were bank owned and they weren't sold by an individual, but instead, they were sold by those evil banks that got us into this mess in the first place. Not only did the Cretans foreclose on the homes and kick out homeowners, but now they step in and undercut the prices of other sellers and steal their buyers. But we don't have to price our house the way the bank does, because ours is not a foreclosure, so we really don't have to worry about because ours is worth more.

Well welcome to the harsh reality of what I like to refer to as the truth. It's not always a fun thing, but you have to face it if you want to be successful in today's market. All those foreclosed properties in your community do affect your home. They do lower the market value in a lot of cases, because the banks do lower their prices to aggressively market their properties. As a result, the market value of comparable properties like yours does change.

I know that's not at all what you wanted to hear. In fact I didn't really want to say it, but it needed to be said. You can't ignore the facts.

The facts are unfortunately something that we all have to face and foreclosures and bank owned properties are a fact of life today. They are your competition and you do have to price your house for sale in accordance with the current market value for your community.

Another horrible fact to face is that pricing is one of the most important things to focus on when selling a house. Having a house that's in great condition is also extremely important, but if you find yourself overpriced by ten or twenty thousand dollars, you don't stand a chance of moving anytime soon. So while you may be able to get a little more for your house due to it's better condition, you may want to lose the theory that your house isn'tt affected by foreclosures. Unfortunately, we all are, and we just have to accept it and move on.

No comments:

A Walk Through Historic Wake Forest, NC