It’s no secret that many owners today find themselves in situations of having to sell their home as a “short sale”. It’s not an easy time for these owner. They are having difficulty making the payments, other life situations are probably adding to the stress (i.e. loss of a job, divorce, etc.), and the property has become more of a burden than a “pride and joy” in their lives. But these owners actually have a significant competitive advantage over regular property listings . . . buyer attention. Why? Buyers look for “deals”. Short sales have a buyer expectation of “deal” associated with them in much the same way as ‘foreclosures’. Obviously, unlike foreclosures . . . the seller still owns the house and must get the most for the property to be able to minimize the difference owed and negotiate with the bank how to handle that differnce after close (i.e. ‘forgive’, repayment plan, etc.).
So why are short sales remaining on the market far longer than all properties sold in the area? Many would probably say that it’s the lenders’ fault. They are holding things up. Partly true, but I will tell you that condition and presentation are rearing an ugly hand in the whole process. And owners are missing out on relieving themselves a lot of stress by not addressing these things to help move the process along quicker. Let me explain.
Let’s look at this from a buyer standpoint. You go out to shop for a house. What are you looking for? The most you can get and at the best possible price, right? Right. We all do. You look for the “deals”. So what are the “deals” in Real Estate? Foreclosures and . . . Short Sales. Most buyers don’t want to deal with auctions for foreclosures and only have about 20 to choose from that are straight-up listings right now in Palm Coast. So what do they look for next? Short Sales in which there are a little over 300 to choose from. So what is our expectation as buyers when we go to purchase “deals”? Our expectation is lowered in terms of condition and we are willing to overlook minor issues in lieu of deep discounts. So when a buyer arrives at a foreclosure, they already have in their mind that it probably will need some work and probably has damage, but they will negotiate hard on the price. Guess what they expect when they get to short sales? That the property will need some work and probably has damage, but they will negotiate hard on the price. So what happens when a buyer arrives at the foreclosure that is immaculate and barely been lived in? It sells quick and the buyer will offer close to or at the list price because their expectation is exceeded and they know it will not last. So what happens when a buyer visits a short sale that is immaculate and is presented well? It sells quick and the buyer will offer close to or at the list price because their expectation is exceeded and they know it will not last. Making sense yet?
After visitng a lot of short sale properties and visitng houses that owners wish to sell that will be short sales, it’s apparent that condition and presentation is holding a lot of these owners back. It’s understandable that the property has become a part of their stress. But it’s also a fact that to reduce a good amount of that stress is to get the property sold quickly. To do that, the owner has to be able to bring to the lender a reasonable offer that will minimize the loss as much as possible. So what can short sale sellers in terms of presentation to capitalize on the attention they have from buyers without having to incur further or minmal costs:
- Make it your goal NOT to allow the property to be foreclosed on.
- Keep the lawn cut. Trim the bushes. Keep the yard looking nice. Curb appeal!
- Patch up any minor damage in the house such as chips in paint.
- Clean up any clutter and put any storage items out of the way. If you have to, box it up and put it in the garage neatly. Stored items in a garage are normally understood by most buyers. The living areas are most important to them.
- Take down all personal pictures and items.
- Keep the house clean.
- And other basic staging when selling.
Sound familiar? It’s all the basic staging items that regular sellers already know. Unfortunately, many short sellers are not doing these things and playing right into the buyer ‘foreclosure’ expectation and missing out. The hard part as any seller will tell you, is getting showings. And I can tell you, showings with great presentation will sell much quicker than those with no so great presentation. Short sales are getting the showings. Presentation will increase the chances of getting the property sold much quicker.