Working mostly with buyer representation in the current market, we have been noticing several developing trends that are worth mentioning.
First of all, several listing agents of short sale properties are switching the listings to pending once an offer is accepted by a seller, even if the bank has not accepted the offer yet. This trend is noticable in the chart below, where there are only a few short sale listings closing, while nearly double are currently pending sales.
Secondly, we continuously tell our buyer clients that bank owned homes are the best deals on the market. Some of them can be real "fixers" but overall they are a good deal for buyers who are willing to see past the grime. Not all are grimey - Fannie Mae owned homes tend to have fresh paint inside and out along with new flooring. Others are mold-infested or have recalled exterior siding. Homes are unique, like people, so if you see a bank owned property you think looks interesting, we recommend you give us a call to investigate it further.
In looking at the current numbers, it is clear with statistically significant numbers that the average price per square foot of bank owned homes are 11.8% less than short sales and 24.5% less than regular sales (not short sales and not bank-owned).
My partner, Michael Zaviska and I regularly share an eight-page article with new clients called "Short Sales and Bank Owned Properties: A Buyer's Guide" that we contributed to and revised several times on the pros and cons of being a buyer on short sales and bank owned properties. Usually they find this very helpful.
We can rest assured that our clients are going to get a good deal, often with built-in equity, when buying a bank-owned property. Some short sales are good deals, but they are few and far between. The "wow" good deals we get excited about and call clients within 48 hours of them hitting the market about are typically bank owned properties.
One thing Michael tells buyer clients is "When you see it as a good deal, chances are other buyers will see it as a good deal too." and "Ninety percent of buyers are looking for those 10% good deals."
What he is trying to communicate with clients is that of primary importance is to determine WHAT they are looking for. Be pre-approved and ready to write that offer. When you have found what you want, pull the trigger - write the offer and submit it WITH your pre-approval letter. If you wait, you may be too late.
|Regular (Non-Distressed) Sales||Short Sales||Bank Owned||Total Inventory|
|# of Properties Listed for Sale (Active or Bump Status)||2002||1023||224||3259|
|# of Properties Sold One Month Back from 3/30/2011||179||63||110||352|
|Average Sold Price Per Square Foot||$118||$101||$89|
|Average Cumulative Days on Market for Sold Properties||156||249||92|
|Months of Inventory||11.18||16.23||2.03||9.23|
|# of Properties Pending as of 3/30/2011||456||206||214|
|# of Properties Pending One Month Back from 3/30/2011||267||110||153|
|Average Pending Price Per Square Foot||$123||$102||$91|
|Average Cumulative Days on Market for Pending Properties||167||200||109|