Dealing With Foreclosures From All Sides

Anyone in the real estate business will tell you that foreclosures and short sales are one of the biggest issues keeping the housing market from making a quick recovery and sadly its far from over. As of the beginning of this year there were over 3 million properties in foreclosure with nearly half of them not even listed on the market...yet.

Not only do foreclosures and short sales affect real estate agents they also affect buyers and sellers alike. As a real estate agent it's your job to inform both your buyers and sellers of all the ups and downs to these types of transactions.

As we all know one of the biggest catch-phrases in real estate is "location, location, location" and the same holds true for foreclosures and short sales particularly for buyers.

In every city there are some neighborhoods that have a higher concentration of foreclosures than others and buyers might be a little gun-shy purchasing in those areas. However, they should know that today's biggest buyers of foreclosures are investors who scoop up these properties, clean them up, make improvements and put the homes back on the market for a profit.

At the same time your buyers just might also benefit in buying in these neighborhoods as well because lately these same neighborhoods that are "flipped" by investors are often the areas that are recovering at a faster pace. That's definitely an upside for a buyer to consider purchasing in a heavy laden foreclosed neighborhood.

The next factor that should be considered regarding foreclosures and short sales is its condition. Many times foreclosures need some additional TLC compared to a standard home sale and this can be a deterrent to buyers.

Many times foreclosures have been vacant for a long period of time which can have a negative effect on the property including landscaping, plumbing, AC and furnace as well as other areas.

When a potential buyer finds a foreclosure they are interested in it can be a gamble for them because of the potential risks involved in what it might take to get the home back up and running properly.

On the flipside to that issue, it could also be a benefit because the buyer could get the home at a severely discounted rate which could afford them the opportunity to make repairs as well as some improvements which could turn the home into a positive investment by increasing its true market value.

The next item to be covered is the foreclosed homes price. This is a tricky area because there's usually a big price gap between sellers prices and the potential buyers price for the home.

Often sellers truly feel that their home is worth more than what the market will bear and often buyers see the sellers pricing as much too high for what they're buying. It's a real tug-o-war when it comes to foreclosure pricing and it will take a delicate touch to find common ground between both buyers and sellers.

Dealing with foreclosures is an emotional transaction for all parties, but particularly for the seller and what's most important is that everyone needs to keep an open mind to what the market will bear for the foreclosed home.

And lastly, its come down to the big decision, buy and/or sell?

For sellers, they have to be focused on not only the fair market value of the home but also they need to maintain and stage the home to put it in its best light for a sale.

However, buyers on the other hand need to be informed buyers and need to understand the ups and downs when it comes to buying a foreclosure or short sale.

When it comes to foreclosures and short sales it's a real balancing act for everyone, but one that's not impossible. With some open minds, clear strategy and willingness to compromise foreclosures and short sales can be a real win-win situation for everyone.