Six out of every ten homes sold in Lake Arrowhead year to date were not distressed properties. Two of ten were negotiated short sales and 2 were sales of foreclosed properties. Where other markets, the percentage of distressed properties is much higher, Lake Arrowhead has fortunately weathered the storm better than average. That being said… 40% of the buyers out there purchased a distressed property so it is important to note that sellers must be educated on how best to compete with short sale sale and reo listings.
I hear sellers say….”I’m not competing with distressed properties.” When I hear this, my immediate response is unfortunately you are…. Sellers that are in denial about the fact that short sales and bank owned properties are a major competitor for them are working at a distinct disadvantage. The first step in achieving the sellers goal of selling the property is the understanding they will be competing for buyers with bank owned properties and short sales and there are a few things they must keep in mind.
First, get rid of the emotion. Sellers who is either a bank, or one that is upside down and negotiating a short sale have zero emotion in the transaction. The property is priced below market value without consideration to the emotional aspects of the property. It is simply a business transaction. There are no memories. There are no attachments. Its business. Traditional sellers are looking for the emotional equity in the home above and beyond the market value. In this type of market where plenty of nice homes are available that are distressed, sellers trying to get more than the numbers dictate won’t sell.
Second, price is king! The property must be price below market value. In any given price range there are 85 homes on the market with between 6 and 7 selling. Regardless of how “special” the property is, it must be priced within the lowest 10% of all properties in the range. Less than 1 in 10 homes currently listed in most price ranges will not sell. If there are 10 homes priced better than the sellers, the chances of the property selling in the current market is very unlikely.
Third is access. Sellers must make their property available and easy to be seen by both buyers and real estate professionals. If the people who need to see it can’t, or if it is difficult, chances are they will move on to the next one that is easier to deal with.
Fourth, is condition. Make sure the property is in the best condition possible. Many distressed properties due to the sellers circumstances are not in the best condition. Having the property in tip top shape, and clean is a big advantage in securing a buyer. Consult with your real estate professional regarding the things that will matter most.
Fifth is to consider offering seller financing. Often, sellers are not in a position to offer financing, but those that are can many times attract a buyer away from a property that does not have seller financing offered. Again, discuss with your real estate professional whether or not offering financing will be helpful, and what that type of deal might look like.
Sixth which is equally as critical as pricing is to hire the right real estate firm and agent. Not all real estate agents were created equal. The current market conditions amplify the importance of hiring someone who has momentum in this market and is making deals happen. Too often do sellers hire the person who sold them the property, or a friend which puts them at a distinct disadvantage. It is critical in this market for sellers to have on their team someone with momentum and a proven track record.
Coldwell Banker Sky Ridge Realty has been the number one real estate firm on the mountain for nearly 30 years. Contact me directly for a recommendation regarding which team member will be the best fit for your need.