Me vs. Foreclosures, Short Sales and REOs

Here is snippet from a real estate forum:

I must say Borino you made a tight webpage. In my neck of the woods taking listings isn’t converting much to sales.

In a regular market I could see the numbers working like your excel video. I can see in my mls (area) however everything that is selling is REO or an agent trying to work a short sale in pre-foreclosure.It’s not about if the sellers want to sell they just can’t sell at a price to attract a buyer to compete with REO’s.”

—————————————————-

Yes, true. In many areas this is a challenging market, no question. It takes a lot of effort to sell a house, especially with all the short sales and REOs. I know – Southern California has had its share of them.

BUT – it can still be done. There are folks out there today – right now who have to sell – expired listings or just regular sellers: job transfers, divorces, unemployment, you name it…

So how can you pull it off without losing your mind (and money) in the process? And without sacrificing all that’s left from the seller’s equity?

Here are some tips that helped me sell and close 8 out of 10 listings – even in a crappy market:

1. Market. I had to know my market inside out. What is selling: what area, what type of property, what price range. I would preview and study it every day. Here is the rule: I only list property I KNOW I can sell.

Are you in a market where nothing is selling? Why stick around – CHANGE your market.

2. Price. Price it RIGHT right from the get go. No “testing” nonsense. No “our house is better“. I would do my clients a HUGE disservice by overpricing their home.

3. Reductions. I review feedback and showings quickly. I wouldn’t wait a month to reduce the price. If there is no action in 7-10 days, it’s time to review the CMA and reduce the price. I know, it takes balls to go back to the seller after only a few days on the market. But what’s the alternative?

4. Commission. This is my biggest secret. Most REOs and short-sales offer 5%. Some retail listings offer standard 6%. I offer 7%, 4% to the selling agent. No strings attached. No “full price” silly conditions. Great way to get tons of showings (and offers).

5. Terms. What is the worst part of dealing with REOs and short sales? Terms. Long waiting time. Long approvals. Tons of paperwork. Lots of hassle. No inspections. No guarantees. No repairs. Pain in the ass. I make sure I highlight all the positives of my listings: short escrow, full disclosures, instant response, flexible seller, etc.

Yes, many REOs and short sales are priced low, but keep in mind it’s not ALWAYS just the price.

6. Condition. Many competing foreclosures are in bad shape and need work (or they do a quick-slap carpet/paint job). My listings need to show great. Clean, spiffy, and sharp. They must stand out.

There is more (and I’ll share it with you when Presentation Plus comes out in July). But for now just focus on the 6 points above and you’ll do fine.

What do YOU think? Share Your Thoughts!