One of the hottest markets in Florida, particulary the Tampa Bay markets, is bank foreclosures. Foreclosures have steadily accounted for between 25% to 35% of the sales units in the four counties of Hillsborough, Pinellas, Hernando and Pasco. The purpose of this blog is to help understand what to expect regarding price when shopping for a foreclosed home.
In addition to the hot foreclosure market is the short sale homes which is another part of the distressed housing market. "Short Sale" is the term that identifies a home that is for sale by the owner for a list price that is less than the homeowner's current mortgage balance. Our blog today is focused on foreclosures and we will return with another blog on "How To Find A Good Short Sale."
Before we get into analyzing prices of foreclosed homes, we have have to understand a little about how a bank determines the price they will list the home.
Once a bank forecloses on a property, the bank now owns the property. The term the banks use is REO, short for Real Estate Owned. That term, in a way, is a misnomer since the bank really does not want to own real estate. Rather, they would like to sell the foreclosed home as quickly as possible and put the money they receive, from the sale, back to work in a new loan.
So, rather that sit on a foreclosed house and try to get top price or even market price, the bank will put a list price of 10% to !5% below the current market price. In order to determine that price, the bank will order a BPO or Broker Price Opinion and the house will then be discounted based on the condition of the house, sales activity in the neighborhood and a host of other variables.
Why is this important for you, the buyer to know? Because many buyers are quickly disappointed when they find a house for, say $150,000, and they expect to make an offer for $125,000 and think they are doing the bank a favor to take it off their hands.
Am I saying that REO's are not a good deal? Not at all! There are many good deals, some great deals and some notoriously terrible deals. So let's illustrate what we mean, taking the components of just two of the many variables. Let's look at price range and days on market as two significant variables that will effect the kind of good deal you can get.
Take a look at these two houses:
A B
Size: 1,225 Sq ft Size: 1,298 Sq Ft
3 Bedroom 2 Bath 3 Bedroom 2 Bath
List Price: $106,900. List Price: $105,000.
Sale Price:$109,000. Sale Price: $95,300.
Days on Market: 2 Days on Market: 38
Both of these houses are located in Riverview, FL. Both close in age, both had similar taxes. The only significant difference, without visiting the property and taking personal observation, is the days on the market. Once house "B" began to "sit" a while, the bank settled for less of a price. As a matter of fact, $13,700. less!
What significance does time on the market take? Apparently a lot. Each bank and house has a tipping point. But, generally a bank will drop the price between 30 and 40 days or will be more open to all offers.
We did a study for the month of September 2009 of foreclosures focusing on List Price versus Sale Price and here are some observation for you to digest:
Did you catch that last item? Banks are getting their asking price.
So why is everyone clamoring for foreclosures if the banks are pretty much dictating the price? Because they are already pricing the homes at a bargain to begin with. Review a post by Florida Certified Residential Appraiser Jon Tipton on our site showing the actual numbers by listing classification of owner (traditional), Short Sale (3rd party approval) and REO. Here is what Jon reported in his blog. So you can see from the pricing per square foot, even at the banks asking price, they are priced the lowest.
So why wouldn't everybody just buy a foreclosed home? And that gets to the root of the blog. Supply and demand is why. There are not enough foreclosed properties to go to every buyer and as a result, the banks pretty much get their asking price.
So now that we have established that REO's are a great deal, can we still get a great bargain? YES!!
Take this next comparison:
A B
6 Bedroom 4 Bath 5 Bedroom 4 Bath
List Price: $309,700. List Price: $410,000.
Sale Price: $290,000. Sale Price: $395,000.
These two houses sold within a couple of months of each other. The house on the left, of course, is a foreclosure. The house on the right is an owner occupied home and these houses are on the same street. They both closed close to the same amount days on market.
So what does this tell us? Again, it is supply and demand. Where the previous examples were more influenced by first time home buyers, this last set of homes has a limited number of buyers. As a result, when the bank received and offer on an already depressed market price, the bank jumped on it. Likely there was some negotiation involved to arrive at the final price, but there is no question this buyer got a steal. Even if they would have paid full list price, they would have had a deal. But, their agent skillfully pulled another $20,000 off of the bank's list price.
So What Have We Learned?
Be sure to make a Realtor® a part of your team. Some buyers take this complicated and risky process on their own shoulders. Buyers NEVER pay for an agents services. The agent is paid by the bank. What it will cost you, is not getting an expert to help you find your property. Make sure you have an agent that knows the foreclosure market.
Would you like a copy of this study of the foreclosure market for the month of September? Click this link, Free Tampa FL Foreclosure Report, and we will email you the complete list of foreclosed homes sold in September with addresses, list price and sale price.
Rick Frissell~ Florida's Beautiful Homes
813.340.6828 Cell
This video was made for a client, who has now moved on with his foreclosed property search. This report may be helpful to you if you have any interest large foreclosed homes in the Riverview, Florida area. If you have any questions on this or any other home on the market, please give us a call at
Corks & Forks YMCA Fundraiser
This years YMCA fundraiser has a theme of "Carnivale Flavors of South America" , The event will be held poolside at the Campo Family Center on November 21st 2009.
The event will feature wines from Chile, Argentina and other South American countries, as well as delicious food from a selection of local restaurants.
A variety of sponsorships and ticket packages are available for businesses and organizations interested in supporting Corks & Forks: Viva Carnivale!
All proceeds will benefit the YMCA's Building Strong Kids Campaign, which helps make YMCA participation possible for children and families in the Brandon area regardless of their financial circumstances.
For tickets or sponsorship information, call Mags Oldman at 813-684-1371, ext. 208.
About the Author: Rick Frissell is a licensed real estate agent with Diamond Dwellings Realty- Florida. Rick's office is in Brandon, Florida which serves eastern Hillborough County. Rick Frissell can be reached at rick@diamonddwellings.com or 813-653-1241.
If you are interested in a career in real estate or associating with Diamond Dwellings Realty, please contact Rick! All calls and inquiries will be held in the strictest confidence.
Lifeguard Wanted....
Kevin Church of the Hillsborough County Parks and Recreation Department has announced that they are seeking applications for five Lifeguards spots at Lithia Springs Park located at 3932 Lithia Springs Road Lithia, FL.
Candidates must be at least 16 yoa and have a current Red Cross Lifeguard cetificate.The pay starts at $9 per hour and a background check must be performed.
The job will be between Memorial Day and Labor Day and possibly beyond.
If you haven't been to Lithia Springs Park, it is a real florida beauty. Even if you are not interested in the job, check it out during the summer months.
To learn more about the park and the position go to: www.hillsboroughcounty.org then click on Parks and Trails and then Regional Parks.
Rick Frissell- Diamond Dwellings Realty- Florida
813-653-1241
re-printed from: Brandon Florida Real Estate Blog
 |
|
|
A rarity in the Tampa and Brandon area! One of the few that can claim being a life time local. Local knowledge and experience was a natural fit to become a real estate professional. Localism.Com
How did I get to where I am?
I feel fortunate to have lived in the Tampa/Brandon area all of my life and yet have seen a lot of the world. My travels are the result of time spent in the Navy that introduced me to parts of Europe along the Mediterranean Sea. North American travel was extensive during a 17 year employment with Eastman Kodak.
My last ten years with Kodak prepared me with the professional experience that would be incorporated into the real estate and mortgage business. As a national public speaker, trainer and coach for Kodak, I had the opportunity to discover what people want and need most.
What do most people want?
How does one find the right real estate agent to hire? The search can be daunting. Maybe you go by the most signs that you see along the roads and byways or maybe even the most bus benches. Perhaps the "Million Dollar" or "Multi Million" or even "Multi, Multi Million Dollar Round Table" agent would be your choice.
This is where the Kodak experience comes in. I never met anyone that cared whether Kodak was a major Olympic sponsor or had invented amateur photography. No, what Kodak understood was that people cared most about their Kodak moments. What people wanted most was their memories recorded forever.
I have found that home buyers are most interested in hiring someone that understands they want more that a house. What they want beyond a house is a home. Yes, a home that provides them their own Kodak moments. They want a house that will give them memories to hold and to cherish.
Interestingly, home sellers are not removed from that same kind of sentiment. Many would be surprised at how often I hear home sellers comment that they hope we find "just the right family" to buy their home. Their memories and moments in their home extend beyond the "For Sale" sign and to a hope that we sell to someone that will love the home as they have.
When we are asked to find a 3, 4 or 5 bedroom house, our mission is to find a house that will become their home!
Why Diamond Dwellings?
Diamond Dwellings gives us the ability to be the "Brandon Area" experts and provide the latest in web 2.0 marketing to our customers. Brandon Dwellings has positioned us in the market for the next decade and we are truly excited about what the future holds for us.
LOCALISM: Brandon, Florida Area
Free Florida MLS Search: Click Here
Florida Licensed Real Estate Agent
Click Here For: Video Testimonials
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
