The Eagle's View
Rants and raves about real estate related topics by Mike Bradley, Broker/Owner of Eagleview Properties in Littleton, Colorado.Wednesday, November 14, 2007
Is EVERYONE in foreclosure?
If you believe all the media...which by the way loves to report on bad news...every home is in foreclosure. Now the statistics say that's just not true, but it's hard to believe the stats when you have a day like I did last Saturday.
I showed a total of 19 homes on Saturday and all but three of them were advertised as, "subject to lender approval," or "bank-owned". And the buyers I was working with weren't even looking specifically for a bank owned home, it just happened that most the homes in their price range ARE bank owned or about to be.
By my calculations, that's 84% of the homes I showed in one were in or about to be in foreclosure because the owners are behind on payments.
How does that affect you? Well suppose you have a home to sell and you are NOT behind on mortgage payments and not in foreclosure. You list you home for the appropriate price, let's say for example you ask $200,000 because your home really shines. It's full of upgrades and well taken care of and the comparable sales justify your price. But down the street is a nearly identical model for sale that is bank owned. It's got similar upgrades but needs some cleaning and minor repairs.
Now comes the potential buyer. He/She looks at your home for $200,000 and then the bank-owned home down the street that's priced at $180,000. Your home is move-in ready and shows 100 times better than the other, but the potential buyer often thinks that for $20,000 less, they can afford to clean and make little repairs to have the same type of home in the same area. The end result is the bank-owned home sells and your home does not.
This is happening all over Denver in all price ranges! In order to compete you have to list your home close to the price of these bank-owned homes and that causes market depreciation, which is what all homeowners hate to hear or believe but the media loves to report.
Is your home on the market right now? Are you wondering why there haven't been any offers to buy it yet? Check out the bank-owned homes in your neighborhood and see if that's where the buyers are going.
I showed a total of 19 homes on Saturday and all but three of them were advertised as, "subject to lender approval," or "bank-owned". And the buyers I was working with weren't even looking specifically for a bank owned home, it just happened that most the homes in their price range ARE bank owned or about to be.
By my calculations, that's 84% of the homes I showed in one were in or about to be in foreclosure because the owners are behind on payments.
How does that affect you? Well suppose you have a home to sell and you are NOT behind on mortgage payments and not in foreclosure. You list you home for the appropriate price, let's say for example you ask $200,000 because your home really shines. It's full of upgrades and well taken care of and the comparable sales justify your price. But down the street is a nearly identical model for sale that is bank owned. It's got similar upgrades but needs some cleaning and minor repairs.
Now comes the potential buyer. He/She looks at your home for $200,000 and then the bank-owned home down the street that's priced at $180,000. Your home is move-in ready and shows 100 times better than the other, but the potential buyer often thinks that for $20,000 less, they can afford to clean and make little repairs to have the same type of home in the same area. The end result is the bank-owned home sells and your home does not.
This is happening all over Denver in all price ranges! In order to compete you have to list your home close to the price of these bank-owned homes and that causes market depreciation, which is what all homeowners hate to hear or believe but the media loves to report.
Is your home on the market right now? Are you wondering why there haven't been any offers to buy it yet? Check out the bank-owned homes in your neighborhood and see if that's where the buyers are going.
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