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Listing Homes In Today's Market

September 11, 2011 | Comments: 0 | Views: 164

Home For Sale By Owner

The first lead source of leads for all realtors is the FOR SALE BY OWNER or FSBO or FIZZBO as it's pronounced. The only thing good I can say about FOR SALE BY OWNERS is that most of them are serious about wanting to sell their home. Take a different approach than the other realtors. Find out first if the owner is in default. If they are, find out how much the owner is asking and how much he owes and what the home is approximately worth.

Sometimes the home is worth more than they owe but the owner is still asking too much or doesn't know what they are doing to get a sale. Usually, they are selling on their own because the home is worth $106,000 and they owe $100,000. They hope they will be able to walk away with 6k because of the difference. It just doesn't work that way.

1.) Only a totally uninformed buyer would make a full price offer to a sale by owner.

2.) The owner isn't taking into account the constantly rising closing costs which are currently about 3% of the sales price. (and that's just on the selling side)

3.) The owner isn't taking into account any repair costs which a professional inspection may incur.

4.) The owner isn't taking into account any back payments, late fees, or attorneys costs if they are behind at all.

5.) The owner rarely takes into account that his home is NOT worth more than the identical home in the same sub-division which sold for $105,000 last week.

6.) Homeowners traditionally ask 6% more than their home is worth and then tell prospective buyers that if it doesn't sell soon, they will put it with a Realtor and then the price will be 6% even more.

Think of the logic of that last one. A home is worth $106k. The owner thinks because it's HIS house its worth $110k. He knows the average buyer will offer about 5-10% less so he jacks the price up to $118k. Now he tells the prospective buyer that if it doesn't sell, he'll put it with a Realtor at $125k. Meanwhile, there is a short sale and an REO (Real Estate Owned, bank owned, already forecloses) property just down the street with the same floor plan in the same neighborhood for $99k!

The FSBO is dreaming and wishing and hoping. Unless the market is rapidly appreciating (2-4% per month) which it is not now happening nor will it in the foreseeable future. This home owner needs to be educated about the realities. In fact, in my area of Miami Florida, Homes have been DEPRECIATING 2-4% per month since October of 2007. Many homes are worth about half what they were worth in 2006. Using the old square footage average, at the height of the market, homes sold for about $160 per square foot. (including lot) Now they are currently selling for about $75 per square foot or less (including lot) Of course, this doesn't take into account swimming pools, exclusive neighborhoods or acreage.

In any case, if a seller is asking at, near, or below what is owed on the property (including back payments if behind) that seller is a prime candidate for a short sale. The owner is not going to net out anything on the short sale of their home anyway and almost all lenders require a home be listed with a MLS participating Realtor to qualify for the short sale.

To find out how much is owed on the home and if the owner has received an L.P. (lis pendens) or N.O.D. (Notice Of Default) on the home, you must go to the court records. If you are in a progressive county all the county court records should be freely available online. If not you may have to pay a small fee for online access or actually, physically, go down to the courthouse.

L.P. Lis Pendens is Latin and roughly means lawsuit pending and NOD Notice Of Default means just that. The home owner is in default of the mortgage loan agreement and the lender is pursuing their rights concerning the house. The house being the security instrument for the loan. FSBO's will make up a very small percentage of your short sale listings.

The Expired Listing

Prior to getting into short sales, the expired home listings were my favorite and main source of income. First of all, you already know that they are serious about selling their home. Secondly, you know that they are already somewhat educated on the value of using a Realtor. Expired Home Listings can be a good source of regular listings and some of these can be converted to short sale listings.

If a home has been on the MLS and in the internet data bases for any length of time and the listing expires, there is one reason and that is, PRICE. No matter how fantastic a home is or how terrible it is, it still boils down to what a ready, willing, and able buyer is willing to pay for the home. Even I have caught myself thinking, "this home will never sell" but I should have added, "at this price." ANY home will sell at the right price. The challenging opportunity is to convince the owner that the home they are trying to sell is not a castle.

When calling on expired home listings, I won't take one that doesn't fit the parameters of my home listing requirements mentioned earlier. This eliminates a few. Next, if the property is owned outright (doesn't have a mortgage) or the mortgage is 60% or less of rough guess time current market value, I'll pass if the owner is adamant about the price. Unless they are in default, no matter what size the mortgage is, get to these owners as quickly as possible!

Miami Foreclosures

Source: EzineArticles
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