An unscientific look at the residential sales in Brevard County for May 2011 will show the realized sale price declines as a property goes “down the hill” to foreclosure.
Key point: Foreclosures typically have been vacant for an extended time. Foreclosures have very often been stripped of appliances and much of the removable components.
Seller motivation is very often a major difference between a short sale and a foreclosure. In a short sale the seller typically wants to get as much as possible for the property. The incentive here is to minimize the difference between monies owed and proceeds. Thus, an incentive to maintain the property in its best showroom condition!
The steady decline in sales price is pretty consistent regardless of property location or price. For example, take the May 2011 sales in one of the “good” areas of Brevard County – Viera, Suntree and Rockledge.
In May there were 58 standard sales (average selling price of $216,522), 13 short sales sold (average selling price of $174,889) and 7 foreclosures sold (average sales price of $98,769). Again a very steady decline as the sales type goes “down the foreclosure path.”
So what is the message here?
- Investors – your best bet may be a foreclosure for a deal if price is most important.
- Banks – approve the short sale before you let the proceeds decline even further while you throw away money maintaining (loosely used here) the property!
- Standard Sellers – Know thy competition.
- Short sellers – Don’t accept just any offer. Help the banks (and yourself) out by negotiating up front for a real, perhaps slightly discounted, sales price!