The problem is simple and well documented: It’s a seller’s market out there. Inventory is as scarce as mice in a mouse trap factory. To sell houses, you need houses. Fortunately, the solution of finding more houses to sell is right in front of your face: short sales.
Hold on, don’t go. I know, you’re probably thinking: “Are you kidding? Short sales was so 2012. Time to move on.”
Not so fast. There’s still plenty of meat left on the bone. In fact, RealtyTrac, the online real estate tracking firm, has just reported that U.S. banks are actually now more willing to accept short sales – it’s clear they have no taste for the property ownership game. Banks would rather perform a short sale than a foreclosure any day. A foreclosure takes a long time and creates a huge expense for the banks; a short sale saves both time and money.
Right now short sales range from between 10% and 50% of sales in various markets and some analysts believe in 2013 we’ll see more short sales than any other year to date. One big reason is the program, Making Home Affordable, which expires this December, along with many other government incentives like Home Affordable Foreclosure Alternatives.
What’s more, RealtyTrac adds that the U.S. real estate crisis is far from over.
“Distressed sales are still a disproportionately high portion of the overall housing market,” Daren Blomquist, vice president of RealtyTrac, says. “And while distressed properties are selling at a significant discount compared to non-distressed properties, average distressed property prices are increasing in many markets thanks to strong demand and limited inventory.”
Here are some important items to consider about short sales for 2013 and beyond:
Short sales make you a lifesaver – literally. People in a short sale situation need a lifeline and you can toss it to them. I was on a panel recently with Kyle Whissel, broker and owner of Whissel Realty in San Diego, Calif., when he said, “When you’re doing a short sale for people, you are a lifesaver for them. Some of my best referrals have been from those short sale sellers. Stay in touch with them, because they could be buyers again a few years down the road.” So to me, it’s not about the sale; it’s about serving that family. It’s free advertising. You can’t pay for a referral. A servant’s heart helps you in the community. It’s like free branding.
Buyers have a lot to gain with short sales, especially in this seller’s market. As you know, inventory is tight right now. Buyers should be – and in many markets they are – on the lookout for distressed properties. They are finding great properties they’d otherwise overlooked if they categorically dismissed foreclosures and short sales. When the market is tight, looking at distressed properties makes even more sense. Be sure to tout this in your advertising efforts.
You must have a short-sale specific plan. If you’re going to get away from the one-trick pony model (a move I strongly encourage), you’ll need to put pen to paper with a detailed plan on how you’ll describe, position and market your new services.
E-mail me today at article@corcorancoaching.com.
