In Sonoma and Marin short sales and foreclosures need to be aggressively priced to generate sales. The six months’ average sales price on a per square foot basis reflects this:
In Sonoma
- The 1436 homeowner (non-bank influenced) sales sold at $260 per square foot
- The 736 foreclosures sold at $169 per square foot
- The 564 short sales sold at $185 per square foot
In Marin
- The 959 homeowner sales sold at $460 per square foot
- The 194 foreclosures sold at $271 per square foot
- The 180 short sales sold at $315 per square foot
Banks
- In Sonoma bank foreclosures sold at a discount of 41% while in Marin the discount was only 35%. The foreclosure discount is primarily based on the condition of the property.
Banks foreclosures are frequently are not in the best of condition. The banks sell ‘as is’ … take it or leave it. Today I’ve got a buyer awaiting word on 585 Whitewood, San Rafael … a home priced so attractively that there were seven offers … this is a property that will take $100,000 to bring it back to being a home.
Short Sales
Because of the uncertainty of closing escrow (and the fact that the home will reflect the owners’ degree of financially and emotional distress) the price on short sales is far below the homeowner sales price.
- Based on the price per square foot, in Marin the short sales sold for 68% of the homeowner price while in Sonoma the price was 71% … and here’s why:
Short sales are a different breed of sale, a sale based on uncertainty. The sellers are frequently out of money and low on energy. The banks have a say in whether the sale goes through. The listing agent needs to be knowledgeable in the ins and outs of short sale.
I’ve had buyers wait for months to no avail. Examples: 16 Picadilly, after five months the bank foreclosed. This property is now on the market as a foreclosure; 415 Sylvia, 273 nights on market … enough.
Michele and I just put a wonderful Adobe Creek five bedroom home on the market in Petaluma for $589,000. The home across the street, a homeowner sale, flew out with multiple offers at $549,000. 2163 Falcon Ridge drive has 1000 more square feet than the other home, shows well (thanks to our seller and his many friends in the neighborhood) and portends to be a fairly quick short sale (we have good communications with the lenders) … but short sales are a different breed.
Homeowners
Homeowners who have succeeded in selling have made their homes attractive … attractive price and top showing condition.
The good news for the homeowner who wants/needs to sell is that while they’re competing with the banks they have a leg-up: Banks frequently don’t spend time or money to make the property market-ready. Market ready is a combination of curb appeal, marketing, staging and pricing. I like to include a letter stating how wonderful the home is, how marvelous the neighbors are, etc.
It’s a wild world out there …