These days it’s easier to make a low-ball offer than it used to be, but with short sale properties, foreclosures and overall prices at historic lows it’s important to be offer smart. Here are some things that a potential buyer should consider when making such an offer:
1. Use foreclosures as comps carefully. Look realistically at the prices of foreclosures if any, in the neighborhood brought. Foreclosures aren’t good comps if the lien holder removed some valuable components of the home like appliances. Don’t forget to look at other closed sales in that neighborhood that are not foreclosures.
2. Examine details of short sales critically. How many liens were there against low-selling short sales? If there were no secondary liens, the lender had considerable flexibility. Your agent should be researching all Deeds of Trust and discussing with you the amount financed on the property.
3. Establish realistic time frames. Even in the best of circumstances, foreclosure takes a long time. Will the seller/bank play the waiting game? How long have houses whose owners have equity stayed on the market? Is the buyer in a hurry? Again, your agent has access to the days on market for listed properties and can usually get some information about the seller to indicate what their situation may be.
If you make a low-ball offer, the bank probably won’t be in any rush to take it. They’ll likely just keep soliciting offers without coming back with a counter. Ultimately, the property is likely to sell for a higher price and, chances are, you and your agent won’t know it until the deal is done.
We have been fortunate to have a very low number of foreclosures and short sales in the Highlands and Cashiers area. Prices have held up fairly well, even though the number of transactions are down. For complete information on Market Conditions in Highlands or Cashiers NC, please contact Michelle Muraco anytime at 866-526-3558 or by email at firstname.lastname@example.org.