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Short sale buyers want discounts: is it possible?

Everyone loves a good discount, and everyone knows that short sales go for less than a traditional resale home, but is it always possible to negotiate down a short sale?

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Discounted Home Prices on Short Sales

Have you ever shopped at one of those discount variety stores like Dollar Tree or 99¢ Only? If you’ve not heard of these stores before, you should know that everything in the entire store costs one dollar or less! In fact, when one of these chains opens a new store, they actually offer televisions for one dollar or less and they have people lined up overnight just to get the bargain!

I love the idea of getting a something good at bargain prices, and apparently I’m not the only one since these variety chains are thriving. In fact, I was recently asked if short sales be purchased at discount prices like these and whether there are certain short sale lenders that offer deeper discounts than others. The answer to these questions is not quite as simple as picking up a few items at a discount store.

Can short sales be purchased at deeply discounted prices?

In most cases, buyers of short sales will pay market value or very close to market value for the home they are purchasing. Short sale lenders know that many parts of the United States currently have low inventory and increased real estate values so they are less likely to accept a deeply discounted price for property listed as a short sale. That being said, if the property is in very poor condition (perhaps so poor that no lender would make a loan on the property), this could compel the bank to accept a lower or more discounted offer.

Which short sale lenders offer the deepest discounts?

There’s really no way to easily determine which short sale lenders offer the deepest discounts. That’s because the major lending institutions service notes for hundreds of investors—each of which establishes its own guidelines for what will be accept in a short sale. Some of these investors may not want to pay closing cost concessions, and others may agree to accept 92¢ on the dollar. Overall, you may be able to ascertain through local data the difference between the list price and the sale price on short sales versus traditional sales, but that establishing the discount rate is not information that is readily available.

Is buying a short sale worth it?

If you understand the risk going in (that the bank may want more than your offer price and that it is going to take a few months to complete), then a short sale may be worth pursuing—especially if you or your client wants that particular property. With inventory low in many parts of the United States, short sale listings are getting just as much traffic and just as many offers as traditional sales. I know an agent that just had 300+ people at his short sale open house this past weekend!

So, if you are looking for a deal on a short sale, here’s the thing: it’s hard to know from the outset whether you will get a deep discount on a short sale, so if that’s what you want, you may be better off filling your cart with bargains at the local 99¢ Only Store.

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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