SHORT SALES and FORECLOSURES
Carlsbad buyers often believe that buying a short sale or a foreclosure will yield a tremendous deal. This can be a misconception, and seems to arise from all the hype in the media, and the notion that since they are distress or hardship sales the price will be much lower than a typical sale for a comparable home.
This may or may not be true.
No buyers should be surprised to hear that short sales can be difficult to finalize and may take many months to complete, or to even get an approval from the lender(s). Some don't close at all.
READ MORE: Buying a Short Sale - this is not a new article but the personal stories from buyers are enlightening
Short sale and foreclosure homes in good condition, and including the normal appliances and fixtures, may not cost any more to bring up to the buyers' standards that typical sales. Sadly, however, many of the distress sale homes are in bad shape and may cost thousands to repair. Depending on what you pay for them it may not financially be a great deal after all is said and done.
There seems to be an illusion that these homes sell for 20%, 30% or more below asking, or will, if one looks at the low ball offers that often are submitted.
So what is the reality?
Here are some statistics from the MLS for Carlsbad and nearby communities (detached homes sold in the last 6 months) that may shed some light, and provide some interesting perspectives on the realities of the short sale and foreclosure market. REOs (bank owned properties) are not included.
|
Town |
# Active |
$ range |
# Sold |
$ Range |
% of list |
Range |
DOM |
|
Carlsbad
|
78 |
$429K-$1.395M |
51 |
$410K-$1.482M |
95% |
86-106% |
121 |
|
Encinitas
|
27 |
$475K - $3.645M |
9 |
$460K - $1.355M |
97% |
90-100% |
97 |
|
Cardiff
|
0 |
0 |
1 |
$595K |
96% |
n/a |
87 |
|
Solana Beach
|
2 |
$799K - $995K |
0 |
n/a |
n/a |
n/a |
n/a |
|
Del Mar
|
4 |
$974,900 - $1.995M |
2 |
$1.075M - $1.1M |
94% |
92-98% |
14 |
|
Oceanside
|
323 |
$135K - $980K |
204 |
$120K - $699K |
98% |
52-123% |
94 |
|
San Marcos
|
149 |
$139K - $800K |
90 |
$145K - $945K |
97% |
70-108% |
108 |
For the most part these homes average fairly close to the asking price, but there is a range. In particular San Marcos and Oceanside which have the most short sales and foreclosures have the broadest range - some homes there were purchased for substantially less than the asking price. So in some cases these homes do sell well below asking, but in many cases they do not, especially when there are multiple offers.
Don't draw any firm conclusions from the data, especially with regard to the length of time on market. Agents may change the contract from active to pending once the short sale is actually approved, but it appears that some never change the date until the deal actually closes. While an offer may be accepted by the seller quickly, the actual time until the deal closes can be many months, and summary data from the MLS do not always reflect this. What is of most interest to buyers is the length of time from when the final offer gets accepted and the deal closes, and NOT how long the homes are being marketed. My advice? Take the days on market with a grain of salt.
Case in point - one home in Del Mar went pending after only 14 days, but it took 121 days to close from that point.
Data inconsistencies are not limited to marketing time either. Some agents don't note in our MLS that a sale is a short one, although it is required, or the remarks are ambiguous. And some sales are noted as requiring lender approval but are actually already lender owned. That being said, the true number of short sales and foreclosures may be different.
It is recommended that you work with a REALTOR who is knowledgeableable about the local market AND who has experience dealing with the short sale and foreclosure market. If I can provide more information or answer any questions, please let me know.
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If I can provide more information about Encinitas, Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.
All content copyright © 2008 Jeff Dowler Carlsbad Homes and Real Estate Tidbits
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If I can provide more information about Carlsbad homes and real estate for sale and surrounding areas, the housing market in general (or locally), or otherwise assist you, friends or family in a home search or sale, please contact my mobile office or text me at (760) 840-1360 or email me at JeffDowlerSolutions@gmail.com
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