Foreclosures vs. Private Sellers: Who’s Got the Edge?January 24th, 2011 by PA - Bloger
As the real estate market remains unpredictable, private sellers are finding they have more competition than usual. The amount of foreclosures currently on the real estate market is causing concern nationwide for property owners simply looking to make a sale.
Why are bank-owned properties such stiff competition for private sellers? BankingMyWay.com sums it up simply as “There has never been a better time to buy a bank-owned home. They’re available, they’re cheap, and banks are more likely to assist with financing.” The bottom line is that the real estate market today is flooded with foreclosures – meaning, banks have hundreds of properties that they want sold ASAP. A bank is highly motivated to get their property sold since there is no profit to be made, only monetary loss to be stopped. Also, a bank doesn’t have any emotional attachment to their property like a private seller does – it’s purely a business transaction, and a bank is looking to close the deal.
Bank-owned properties can present lucrative opportunities, though buyers still have to practice their due diligence and cover all their bases prior to purchase just as they would from a private seller. Foreclosure properties are sold in ‘As Is’ condition, and there’s little chance for negotiation. Some buyers find there is more wiggle room when dealing with private sellers on issues such as repairs, closing costs and dates, etc. Also, with the steady competition of foreclosed properties, private sellers are becoming much more flexible on price.
Still, the abundance of foreclosures is viewed as a profitable windfall for real estate investors, where a buyer can capitalize on acquiring properties they never would have been able to afford a decade ago. This new facet of the real estate market is giving private sellers of real estate at auction a run for their money and pushing them to develop new marketing strategies to get an edge in the competition.
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