The number of home purchases involving foreclosed properties or short sales is more significant now than ever before. However, for many would-be sellers, the idea of competing with the ridiculously low-priced house down the street somehow doesn’t sound all that encouraging. MSN recently offered some advice to the non-distressed, above-water sellers on ways that they can compete with foreclosures.
1. Sell sooner rather than later.
We’re not suggesting that you should sell ASAP if you’re unsure about it, or if you really don’t have to. But if you are planning on selling soon, or if you need to sell, now is the time to make your move.
“Sure, the slowdown in foreclosure activity could mean less competition now. But you should account for a boomerang effect: The number of foreclosures is expected to skyrocket later this year.”
2. Get your story out
In many parts of the country, foreclosure purchases and short sales comprise 20% to more than half of all home sales.
“If you are a long-term homeowner who has kept up on your mortgage payments, you must deliver that message. This is your key advantage over a lower-priced foreclosure, especially in light of the robo-signing mess. Buyers will know from whom they are buying the home —no title issues here. You can get this point out tactfully in your ads with phrases such as ‘long-term ownership’ and ‘been in the family for decades.’”
3. Do your homework.
Informed buyers (read: serious buyers) will come prepared with a list of comparable properties which will include any active listings or sales (standard, foreclosure, and short sales alike) in your neighborhood. Sellers may want to, “Provide your own market analysis, which can help highlight the challenges facing foreclosed properties.”
Your market analysis, according to MSN, should include two parts: “The first report should be of comparable homes sold in the past few months, with foreclosures broken out separately…The second should detail homes on the market now. This will help you frame the decision on favorable terms: Buyers should consider homes like yours instead of foreclosures.”
4. Price aggressively without undercutting foreclosures.
Listen up: “The aim is to sell your home, maybe with a small gain. Forget about making a killing. Few homeowners who are current on their mortgage can match a foreclosure price.“
However, buyers are still looking for a good deal. MSN advises sellers to, “Look at what other nondistressed properties are selling for in your neighborhood and set your price below them. Drive home the point that the price is the price — with foreclosures, a bank can take a better offer until the day of the closing.”
5. Burst those foreclosure fantasies.
Most buyers are not completely aware of what it takes to buy a foreclosed home. Frequently, “Individual buyers don’t stand a chance because they compete with investors who are ready to pay cash. If buyers or agents don’t know this, enlighten them. There is a significant percentage of buyers (who) could not buy a foreclosure if they wanted to.”