What do banks know that home sellers do not?

Osceola MLS reports indicate that bank owned (REO) homes are selling at a higher percentage than non-bank owned homes.

When searching for homes that sold in May, I found that 73 of the homes that sold were listed as being bank owned. 73 out of a total inventory of 488 homes listed as being bank owned or approximately 14.9%. In comparison, 146 homes sold in May that were not bank owned. 146 homes out of 5916 non-bank owned property or 2.4%. 14% as compared to 2%

So what do banks know that traditional sellers do not? The simple truth that price is king. Banks understand that the current real estate market does not care how much was paid for the home originally, the bank understands the market does not care how much was owed on the home and the bank understands that the market will not make an exception simply because they would like it to.

A large percentage of traditional home sellers continue to adhere to magical thinking. This magical thinking to often receives support from the listing agent who should have never taken the listing to begin with or who should have been more aggressive with obtaining price reductions. Magical thinking gives the seller false hope that even when faced with the hard facts of supply and demand, they believe their home will beat the odds and a buyer will come along and agree to pay 20, 30 or 40% above market value for their home.

It is not going to happen, as the banks are painfully aware. Price your home correctly and it will sell. If you cannot afford to sell at today’s market value, wait. If you cannot wait then you will need to consider your options that may include short sale, restructuring of your mortgage or deed in lieu. Give me a call to discuss your specific situation.


Related Florida real estate views:

I am not going to give my home away!

Americans believe home prices will increase

I would not buy a house in Florida.


- Greg Staker - Watson Realty Corp. - 407-304-0255