Short Sale Prices Dropping as ‘Pre-Foreclosures’ Sell Faster

It may have taken lenders quite a while to figure this out, but “short sales” priced aggressively will sell faster.
And that’s exactly what’s happening in hardest-hit housing markets, as lenders see a pre-foreclosure sale – mostly a short sale – as a much more favorable option than owning, maintaining and marketing an REO for sale.
These findings are detailed in RealtyTrac’s report: A Building Wave of Short Sales in 2012.
The average price of a pre-foreclosure sale property nationwide was $184,221 in the fourth quarter of 2011, down 3.45 percent from the previous quarter and down 11.26 percent from the fourth quarter the previous year.
The trend in lower sales prices for short sales persisted in January, when the average pre-foreclosure sales price was $174,120, down 4 percent from December and down 10 percent from January 2011.
“It appears that lenders are finally realizing short sales will sell faster if they are priced correctly,” reads RealtyTrac’s report.
Moreover, the gap between pre-foreclosure sales and REO sales is shrinking, a sign that lenders are shifting their mindsets and seeing short sales as a more favorable option to foreclosure, and the subsequent upkeep and marketing of an REO for sale.
Even with the lower prices for short sales, lenders are seeing a greater benefit out of a short sale than an REO sale.
The average price of a bank-owned property (REO) nationwide in January was $145,597, nearly $30,000 below the average sales price of a pre-foreclosure property and 34 percent below the average sales price of a non-distressed property.


2 thoughts on “Short Sale Prices Dropping as ‘Pre-Foreclosures’ Sell Faster

  • April 22, 2012 at 8:53 pm

    Short is always better than going through Foreclosures – saves the bank some $$ and the homeowner would see less impact on the credit score

  • April 29, 2012 at 4:47 pm

    Think the high-end of the market hasn’t been felled by the economic downturn? Guess again. Here’s a lovely four-bedroom contemporary home in Malibu, Calif., that is now being offered as a short sale with a recent price drop of $1 million. Ouch.
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