Foreclosures and Short Sales vs conventional sales

There are some buyers that are only looking at bank owned properties. They think these are the best deals, but this is not always the case.


Banks are willing to take between 8 and 10 percent less than the appraised value for their properties. Many homeowners are willing to take less than the appraised value for their homes as well, and some even advertise below appraised value.


When an offer is made on a bank owned property, the first thing the bank does is order an appraisal to determine the value. The next step is to have the closing company prepare a HUD form with all the cost involved in the sell of the property to determine the bottom line. The banks have no emotions, if the offer meets their bottom line they will accept the offer, if it doesn't, they have an unlimited supply of money especially with the government bailouts, and they will sit on the property.





As the housing market declined in 2007 and 2008, some homeowners were still living in the past, and thought their homes should be worth what they were at the peak of the market. Now, the smart seller knows the current market conditions and have priced their homes accordingly.


A homeowner that is serious about selling their home has to compete with the bank owned properties, therefore they have lowered their prices. In addition the homeowner is emotional, the price they are willing to accept fluctuates based on any number of factors, and can change daily, this can work to the buyers advantage. The homeowner also has a limited supply of money, and may be in a must sell situation.
So the moral to the story is; when everyone else is buying bank owned properties, it is a great time to look at the properties offered by the homeowner.

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