Buyers' Market: Distressed Properties vs. Traditional Listings

The discount alone appears to be enough to make distressed properties a better deal than more expensive traditional listings -- if it doesn't needs a lot of work, if you can out-bid the investor and if you've got time to make the deal pencil, among other "ifs."

by Broderick Perkins
© 2011 DeadlineNews.Com

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Deadline Newsroom - Distressed homes come with deeply discounted prices, but their prices continue to tumble. Homes sold the traditional way cost more, but prices are more stable.

CoreLogic's latest "U.S. Housing and Mortgage Trends" report, issued in late July says traditional home prices appear to be doing better than homes in the distressed sector and the trend is expected to continue.

CoreLogic reported its home price index of traditional home sales dropped only 0.4 percent from a year ago. Toss in distressed properties and the index was down 7.4 percent.

The report also says while the prices of traditional existing and new homes have returned to 2009 levels, prices for bank-owned foreclosures and short sale transactions -- distressed homes -- are 10 percent below 2009 levels and "continue to decline," CoreLogic reports.

So far this year, distressed sales nationwide accounted for one in three of all homes sales, 33 percent. In 30 major cities CoreLogic tracks, the price discount on distressed sales ranges from about 20 to 60 percent, or an average of about 40 percent.

The discount alone appears to be enough to make distressed properties a good deal.

But there's more to consider. Get the full story here: "What’s the Best Buy? Bargain or Full-Priced Real Estate?"

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

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Bank owned property boom, bonanza for buyers

Checking account banks
pulling wool over your eyes

Clear Capital's Home Data Index (HDI) Market Report for March, reported that housing prices in the West were the first to experience a rebound from prior bottom prices, only to sink again, and suffer what's called a "double dip." The rest of the nation wasn't far behind.

by Broderick Perkins
© 2010 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - The long anticipated "double-dip" in home prices has arrived and it's fueling a fast-spreading fire sale in every corner of the nation's housing market.

The weak economy and a second surge in discounted bank-owned properties are behind the second-time-around dip that's positioning more and more fence-sitters for a clear shot at bargain-basement deals throughout the rest of the year.

Clear Capital's Home Data Index (HDI) Market Report for March, reported that housing prices in the West were the first to enjoy a rebound from prior bottom prices, only to sink again, and suffer what's called a "double dip."

Get the full story here: Bank Owned Property Boom, Economy Deliver Double-Dip Bonanza For Buyers

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© 2010 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!" now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Under the DeadlineNews Group umbrella:

Perkins is managing editor of HomeAway.com's Gulf Coast Response Center.

Perkins was the first Examiner to cover three beats for the Examiner.com news service:
• National Real Estate Examiner
• National Consumer News Examiner
• National Offbeat News Examiner

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Net's Ease Doesn't Guarantee Bargains

Browsing for housing on the Internet has become just about as important has having a real estate agent help find a home to buy, but the ease of finding a home on the Net does not guarantee a bargain.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Browsing for housing on the Internet has become just about as important has having a real estate agent help find a home to buy, but the ease of finding a home on the Net does not guarantee a bargain.

According to National Association of Realtors data culled by ForSaleByOwner.com,
in 1997, 50 percent of all buyers found their homes through a real estate agent. By 2007 that number had fallen to 34 percent.

During the same period, the percentage of buyers who found a home on the Net soared from 2 percent to 29 percent.

More homebuyers than ever are using the Internet to find the homes to buy because most real estate agents put their listings on the Net, more real estate Multiple Listings Services have gone public thanks to information technology and more and more listings Web sites are popping up to make the online search easier and more complete.

In 2007, the other ways buyers found homes were a yard sign, 14 percent; home builder and friend or relative, 8 percent each; newspaper ad and direct from sellers, 3 percent each; book or magazine, 1 percent.

"With millions of online real estate searches done monthly, it's no surprise that the Internet is so effective at helping people find their ideal home, condo or vacation property," said Greg Healy, VP of Operations.

"This data, which comes from the National Association of Realtors, provides more evidence that real estate consumers are very successful in finding homes on their own," he added.

Finding homes easy, finding deals, not so much

Nevertheless, the lack of uniformity in quality control, geographic coverage and search methods from one Web site to another, still often renders the online search less than complete.

And, according Redfin.com, buyers shouldn't confuse finding a home quickly with finding a hot deal. That still requires some work.

"Homebuyers have begun crawling out of their bomb shelters hungry for big
discounts off the asking price," said Redfin CEO Glenn Kelman.

"Often, their expectations are unrealistic, as many sellers have already aggressively priced their homes. But when conditions are right, we've found that a small but significant number of sellers concede $50,000 or more at the negotiating table. We've tried to take the mystery out of when a seller will give ground and when she'll stand firm," Kelman said.

Redfin's "Science of Real Estate" center studied the differences between homes that sold for a large discount and those that didn't, and came up with guidance for buyers looking for large discounts.

The recommendations aren't negotiating tips but "what-to-look-for" tips.

Redfin says:

Look for languishing listings. Heavily discounted homes are 83 percent more likely to have been on the market for 90 days or more. Most sellers will hesitate to accept a low offer if the property has been on the market for only a few weeks.

Find fixer-uppers. Heavily discounted homes are 73 percent more likely to need some fixing up. People who sell homes before fixing them up are usually more concerned about speedy selling than peak price. Get the home inspected before you buy so you know exactly what needs work.

Retreat from remodels. Heavily discounted homes are 20 percent less likely to feature a noteworthy remodel. This also means sellers who sink money into major remodels before they list could be missing out on certain buyers.

Pick properties with pared prices. Homes that are already heavily discounted are 28 percent more likely to already have price reductions. Duh.

Hunt homes with long-time owners. Heavily discounted homes are 52 percent more likely to have been seller-owned for 20 years or more. The longer a seller has owned a property, the more equity he has likely accumulated, and the more likely he is to make significant price concessions.

Put your finger on a flip. On the other hand, heavily discounted homes are 9 percent more likely to have been owned for less than five years. A home owner or investor in trouble may be motivated by the need to quickly reclaim capital, rather than wait for equity growth.

Don't bank on bigger bargains from bank-owned homes. Heavily discounted homes are 9 percent more likely to be a short sale or bank-owned. Banks lower prices as much as possible from the beginning to unload distressed properties as quickly as possible, but no so much to take more of a loss than is necessary.

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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