9 DEADLY MISTAKES HOME SELLERS MAKE # 4

DEADLY MISTAKES HOME SELLERS MAKE – #4

Selling the most expensive asset that most families own is serious business, not something to be taken lightly.  It can be a highly stressful process and costly mistakes are easy to make.  In order to net the most from the sale it takes careful planning and some work on the seller’s part.

Based on our years of first-hand experience, we have compiled a list of the 9 Deadly Mistakes Home Sellers Make to help home sellers avoid them.  As the old proverb says, “forewarned is forearmed.”

A copy of the list is available at no charge to anyone who requests one by e-mail.

DEADLY MISTAKE #4 –

Forgetting about health and safety issues

Be up front and disclose to your Realtor any problems with the property.  The chances are that the problems are going to be discovered anyway.  A decade ago, health and safety issues were rarely a part of the typical real estate transaction.  Today, however, it is common for inspections relating to health, safety and even environmental concerns to be part of most sales contracts.  Moreover, in many states, the seller must disclose to the buyer any knowledge of existing property problems.  In many cases these issues have been or can be factored into the home’s listing price.

Lenders are more cautious than ever, requiring copies of every inspection report and demanding that every problem be corrected before the loan will be funded.  So, disclosing problems and getting them corrected is the fastest way to get your home sold.

A good listing agent has two jobs.  First to sell your home and get you the highest possible net proceeds.  Second is to do so in a way that will not end up in litigation six months to a year after the sale because the buyer was not told everything about the property.

BANK OWNED (REO) HOME SALES DATA FIR EL DORADO HILLS,CA–JULY 2010

El Dorado Hills, CA REO (BANK OWNED) SALES DATA FOR July 2010

 

This is a continuation of our three year monthly report on Bank Owned (REO) home sales data for El Dorado Hills, CA.  This report covers Bank Owned homes sold in July 2010.

There were 12 Bank Owned homes sold in July, the same number that were sold the previous month.  REO inventory in El Dorado Hills has actually increased over the past four months from a one month supply in April, a 1.5 month supply in May, a 1.7 month supply in June and a 2.5 month supply in July.  The inventory of all homes available on the market also increased to a six month supply in July.  Six months is considered a neutral market, so we are in a neutral market at this writing.   

The average days-on-market increased from 51 to 55 days. Two of the REO homes that sold had been on the market over 100 days. Only 25% of the REO homes sold were on the market two weeks or less.  This is a smaller percentage than usual.    

The 12 REO homes that sold represent 23% of all homes sold in El Dorado Hills in July. 

The cost per square foot of REO homes in July was $ 144, down one dollar from the previous month.  The cost per square foot of all homes sold in July increased $5 to $ 167. 

The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO homes represented only a 3% savings for REO buyers in June, a much smaller difference than normal.

The overall sales price for REO homes was 99.9% of the final asking price, and 95.9% of the original asking price, and 34% of the buyers paid more than the asking price for REO homes in July.  There is obviously not much room for negotiation in these transactions.

The actual, measurable savings is the difference in cost per square foot between REO homes sold and the cost per square foot of all home sold:  in July, $ 13 per square foot.  That is a $ 32,500 savings on a 2500 square foot home, not a small sum.  

The data follows:

 

BANK OWNED (REO) HOME SALES DATA FOR FOLSOM, CA JULY 2010

Folsom, CA REO (BANK OWNED) SALES DATA FOR July 2010

 

This is a continuation of a three year study of Bank Owned home sales for Folsom, CA.  This report covers REO homes sold in July 2010.

There were only 9 REO homes sold in July, the lowest number for some time and a continuation in the trend of reduced number of REO homes sold in Folsom.  That trend paralleled the reduction in the number of REO homes available for sale.

The average days-on-market for the month was 54, back within the normal range after a statistical anomaly of 84 days the previous month–due to the sale of one home that had been on the market for 525 days.  There were no homes that sold that had been on the market for over 100 days this month.   In July only two of the bank owned homes sold in two weeks or less, an unusually small number.    

The 9 homes sold represent only 20% of all homes sold in Folsom.   

The overall home inventory in Folsom increased markedly to a 5.5 month supply, up from the 3.2 month supply reported for June and the highest reported level of inventory in Folsom for more than 14 months.  A neutral market is considered a 6 month inventory.  So, we are moving from a seller’s market to a neutral market.  The inventory of bank owned homes has also increased.  It is 4.7 months, more than double the 2.2 month inventory reported in June.    Available inventory in Folsom has not reached the six month level in well over a year.

The cost per square foot of REO homes sold in July increased to $ 170, up from $ 165.  It has been running in a narrow range of $ 176 to $ 156 over the past fourteen months. The cost per square foot of all homes sold in January was $ 174, unchanged from the previous month.      

The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO sales represented only a 2% savings for REO buyers.  This is the smallest margin since we started reporting these figures.

The overall sales price for REO homes was 94.2% of the final asking price, and 23% of the buyers paid more than the asking price for their bank owned home in July.  There was only a $ 5 dollar per square foot savings in the purchase of REO homes, compared to the cost of all homes sold.  When we apply that price difference to a 2500 square foot home it represents a $ 12,500 savings, something worth considering when selecting a home.

The data follows:

BANK OWNED (REO) HOME SALES DATA FOR EL DORADO HILLS, CA -JUNE 2010

El Dorado Hills, CA REO (BANK OWNED) SALES DATA FOR June 2010

 

This is a continuation of my three year monthly report on Bank Owned home sales data for El Dorado Hills, CA.  This report covers Bank Owned homes sold in June 2010.

There were 12 Bank Owned homes sold in June, down 20% from May.  This reflects a very low inventory of 1.7 months supply in June.  Inventory was a one month supply in April and a 1.5 month supply in May.  The inventory of all available homes in El Dorado Hills is presently only a 4.1 month supply.  It had been 7.4 month supply in August of 2009.  Six months is considered a neutral market, so we are still in a seller’s market irrespective of what the media reports..

The average days-on-market jumped to 51 days, up from 33 days in May.   Only two of the REO homes that sold had been on the market for over 100 days.  Only 25% of the REO homes sold were on the market two weeks or less.  The well priced homes are selling quickly as usual.  Those that were not well priced took longer to sell—Real estate 101. 

The 12 REO homes that sold represent only 18% of all homes sold in El Dorado Hills in June. 

The cost per square foot of REO homes in June was $ 145, down from $ 150 in May.  The cost per square foot of all homes sold in January increased  $ 2  to $160. 

The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO homes represented a 10% savings for REO buyers in June.

The overall sales price for REO homes was 99.8% of the final asking price, and 93.6% of the original asking price, and 25% of the buyers paid more than the asking price for REO homes in June.

The actual, measurable savings is the difference in cost per square foot between REO homes sold and the cost per square foot of all home sold:  in March, $ 10 per square foot.  That is a $ 25,000 savings on a 2500 square foot home, not a small sum.  

The data follows:

 

BANK OWNED (REO) HOME SALES DATA FOR FOLSOM, CA -JUNE 2010

Folsom, CA REO (BANK OWNED) SALES DATA FOR June 2010

 

This is a continuation of a three year study of Bank Owned home sales data for Folsom, CA.  This report covers REO homes sold in June 2010.

There were 16 REO homes sold in June, one less than sold in May.  The days-on-market increased significantly to 84, up from 45 the previous month.  This increase is due to the fact that one home sold after being on the market for 525 days!  (It was in very rough condition.)  Two others had been on the market well over 100 days.   In June only 19% of the bank owned homes sold in two weeks or less.  This is an unusually small segment of the sold REO homes.

The 16 homes sold represent 22% of all homes sold in Folsom, on the low end of the normal range.  There are far fewer Bank Owned homes available on the market and short sale homes continue to have an impact.

The overall home inventory in Folsom increased to a 3.2 month supply, up from the 2.6 month supply reported for May. A neutral market is considered a 6 month inventory.  So, we are still looking at a strong seller’s market.  Available inventory in Folsom has not reached the six month level in well over a year.  It may be a seller’s market in some areas, but that has NOT been so In Folsom.

The cost per square foot of REO homes in June increased by two dollars to$ 165.  It has been running in a narrow range of $ 176 to $ 156 over the past fourteen months. The cost per square foot of all homes sold in January decreased to $ 174, down from $ 176 the previous month.      

The difference between the cost per square foot of REO properties and the cost per square foot of all properties sold indicates that REO sales represented a 5% savings for REO buyers.  

The overall sales price for REO homes was 96.2% of the final asking price.  Only 13% of the buyers paid more than the asking price for their bank owned home in June, an unusually small percentage.  The banks are still pricing these homes well and in June there was a $ 9 dollar per square foot savings, compared to the cost of all homes sold.  When we apply that price difference to a 2500 square foot home it represents a $ 22,500 savings, something worth considering when selecting a home.

The data follows: