Will Spike in Foreclosures Lead to More People Selling Homes For Sale by Owner?
Cnn, reported that foreclosures are spiking dramatically with increases nationally of 53% and hot spots like California increasing 160% over last year. The article quotes a RealtyTrac executive saying that a large portion of these maybe due to adjustable rate mortgages reaching their first adjustments.
With the build up in inventory and dramatic flattening of home prices, remember the NAR's July Existing Home Sales report which indicated that nationally property values only increased 0.9% from July 2005 to July 2006, will more people attempt to sell their homes for sale by owner?
A home seller who is in trouble can create a win/win situation by decreasing their price by 4% in a flooded market, making their property more attractive due to the lower price.
California example: Traditional real estate listings in area are $500,000, a FSBO with powerful marketing can price property at $480,000, possibly causing a faster sale and reducing carrying costs.
Would home buyers rather pay less in a slow market or will the convenience and mental comfort of using a real estate agent prevail?
3 Comments:
I've read your posts for sometime now, but I can't discern any value from what you're doing other than to carp at Realtors. Here's an alternative POV:
http://www.marketwatch.com/news/story/Story.aspx?guid=%7B7A2570BB%2DC704%2D45EF%2DB904%2D2B8B7FD5AB9D%7D&siteid
Scot,
Thanks for your comment and I appreciate you reading my posts. If you notice in my post, I did not "carp" on REALTORS.
I posed a question asking will a slowing market combined with decreasing prices cause more people to sell FSBO? A valid question as the alternative could be a "short-sale"?
I also asked if creating a win/win on price may help to move a property faster?
Maybe you don't find value in my posts (possibly because you are an agent?) but we trying to create discussion and that leads to new ideas and points of view, which create value.
Also, I did read your marketwatch report which was very good but a few important facts were left out.
A) How much was he asking when selling FSBO?
B) How much did it sell for using an agent?
This was also touched upon on page 2 of the article you mentioned...
"Correct pricing is often a key component of selling a home in a cooling climate"
If the advertised price on the MLS was below what the owner asked when they attempted FSBO, that maybe part of the issue why the property did not sell (As you know, many FSBO's overprice initially).
This is why we suggest to home sellers that they get an appraisal upfront to help determine the real value of the home and it creates confidence to prospective homebuyers that the asking price is correct.
and real estate agents don't carp on fsbos?
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