Wow, short sales have gotten such a bad reputation that Redfin has put this notice on their website:
“This home is flagged as a short sale. We’re sorry, we don’t tour or write offers on short sales because of the slim chance that you’ll get the home.”
For those new to the real estate purchasing game, a short sale is one where the sales price isn’t enough to pay off the loan so the homeowner has to get the lender’s permission to pay less than what they are owed. Click here to find out more about short sales. I have to say that one listing agent I know who specializes in doing short sales says he closes most of the ones he lists. So if you are a seller who might be short sale material, call me and I will refer you to him. He is one in a hundred, so it doesn’t change my theory.
So if even a Redfin (read discount) agent won’t show you a short sale listing, then these are not generally viable listings (which I’ve been saying for a long time). Therefore, if you look at the number of active listings on the market today in, say, Eagle Rock, and you subtract the number of short sales, you get a very low number, which helps explain why well-priced homes are selling with multiple offers. Today, of the 38 listings on the market including condos, single family homes and units, 8 are short sales and 9 are foreclosures. That means that 20% or 1/5 of all the listings are short sales. Another fifth are foreclosures, so 3/5 of the listings in Eagle Rock are normal sales, only 21 properties. That is not very many listings to choose from. Even if you add the foreclosures back in since it is actually possible to purchase a foreclosure if you are really determined, this buyers’ market is over. The sellers’ market is here. Now we have to convince lenders that they need to stop writing down values because of the fiction of a “declining market.†And again, go online and sign the petition regarding the Home Valuation Code of Conduct travesty (http://www.hvccpetition.com).
However, to sellers I say: don’t think that because we are in a fairly hot market right now that you can go back to your 2005 or 2006 fantasy price. That is not realistic. If prices have come down 20% since 2006 in, say, Eagle Rock, which is a rough but not unrealistic number for general purposes, that means that if your home was worth $500,000 in 2006, it’s worth $400,000 today. Yikes, that’s painful! Let’s give Eagle Rock a break and say that prices have only come down 10%. That is still $50,000 on a $500,000 property. Jumping back up to the $500,000 is not happening. However, if you price your home artfully and present it properly, you will get top dollar, whatever that is today. That, by the way, was a little shameless self-promotion, if you didn’t notice.
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