Short Sale or Foreclosure – which is better?
In this week’s Short Sales News Flash, the New York Times article, So Many Foreclosures, So Little Logic, shows the huge loss lenders are taking with foreclosures – 64% of the loan balance.
As a Case Study on Short Sales vs. Foreclosure in the Kauai real estate market – let’s talk about this recent REO sale – 2374 Oka Street, Kilauea
It was listed as a Short Sale for 440 days (MLS 204967). List price started at $719,000, and finally dropped to $449,000 3 months before the auction. This was while realtors were restricted from talking directly to the lenders due to Act 137. I made multiple offers on this property, as did many agents on the island. The buyer interest was there – but the price was inappropriate, and the seller was not willing to submit low offers.
As an REO Listing (MLS 224048), it came on the market priced appropriately at $419,900 and went into escrow within 17 days, with a final sales price of $380,000.
What’s the moral of the story?? Just as noted in the NY Times article, the lien holders ended up with much higher costs, and a lower sales price selling as an REO vs. Short Sale.
But – what does that mean for us??
- As a Seller, it’s in your best interest to do a Short Sale vs. a Foreclosure. Not only can it save your credit, but it’s in the lien holder’s best interest as well. As your agent, I can work with the lenders to help them understand the market, and the value of offers presented (Act 137 has been modified).
- As a Buyer, don’t get caught up in the hype – be sure your agent is knowledgeable about the distressed property market, and that the value is there. Not all listings are equal 🙂 Some REO listings are great values, some are not. Properties that have problems that detracted buyers in the first place, can end up as an REO listing. You must be careful that you don’t buy someone else’s problem…that’s when a discount can be costly!
Coming Soon!! Foreclosure and Short Sale Investor Webinars!!
Free online analytic tools for all atteendees (I’m the only agent in Hawaii offering this!). Be sure to send me your email so you can be included! www.Call4Susie.com
Recent articles of interest regarding Foreclosures, or bookmark my daily updates at delicious.com/Susanna4Kauai.
- Mortgage Firms Struggle to Re-Do Hard Hit Loans
- Senate Grills Administration Over Progress on Foreclosure Prevention
- More Evidence of a Worsening Foreclosure Crisis
- Is a Shift in Strategy Fighting Foreclosures Ahead?