For a time the number of foreclosures on the market made it hard for long time home owners to get a decent price for their house. Since foreclosure prices are usually at rock bottom levels, home owners in good standing just couldn’t match those prices.
But due to robosigning problems, foreclosure sales can be difficult to close and pose certain risks to the buyer. “Robosigning” is when affidavits were quickly put through with the necessary signatures without the signer actually knowing if the document was true and accurate. Now smart sellers can use that fiasco to their advantage.
First, if you can afford to wait until the whole market changes that is your absolute best choice. If you are pondering whether to sell now or in a couple months – don’t wait. Sell now.
Second, let all potential buyers know that you are a home owner in good standing with the bank. You can use phrases like “long-term ownership” or “been in the family” in ads to highlight the fact that you have kept up on your mortgage payments. To the potential buyer this means that there will be no title issues with your sale.
Third, get the facts and lay them out for the buyers. They might have a list that shows cheap foreclosure prices but you can highlight problems that foreclosed properties have. Have ready a list of comparable homes on the market and ones that sold recently.
Fourth, set your price slightly lower than comparable homes in your area that are not foreclosures. It’s next to impossible to match a foreclosure price. You can emphasize that the price will not change. By trying to buy a foreclosure they run the risk of the bank taking a better offer any time up until the closing day.
Lastly, enlighten the buyer about what trouble it is to buy a foreclosed home. One of those problems is the competition from investors with cash. Jim Kimmons, broker owner of Gallery Realty of Taos, N.M., says a significant number of buyers could not buy a foreclosure if they wanted to because of all the competition from investors. Elizabeth Weintraub, a real estate broker in Sacramento, Calif., says that buyers should be afraid to buy a foreclosure.
Due to the problems that arose from robosigning there are fewer foreclosures. This slowdown might not last, and might even swing the other way so take advantage of it if you have to sell.
The article left out what I believe is the biggest problem with non investors buying Foreclosures. And that is that they will have a very hard time getting a mortgage, especially an FHA mortgage,on the property because of the conditions that most Foreclosures are in.