mortgage

Selling in a sea of foreclosures

Easy-to-show homes are easier to sell
Not all foreclosure homes are in poor condition, says Alan Wagner, a sales agent with RE/MAX Gold in Elk Grove, Calif., and 2008 president of the Sacramento Association of Realtors.

"A lot of people who move out because the bank is foreclosing will still vacuum the carpet on the way out. The house is not trashed; it's a very nice house in a good neighborhood that now belongs to a bank," he says.

To compete against these properties, sellers need to make sure their homes are not only in top condition, but also accessible and well-presented to the market. Sellers should hire a Realtor who is an area specialist and who will make a concerted effort to market the home as effectively as possible on the Internet, Wagner says. Experience and realty-related education can be beneficial as well, he adds.

"People want to beat up the bank on price, but when they come into a house that has owner-occupants, if it is competitively priced, it is probably going to show better," he says.

Billings advises it's probably not a good idea to hire a Realtor who specializes in the sale of bank-owned property, since these homes typically are sold on a high-volume, low-cost basis and that strategy may not be appropriate in a conventional situation.

Unsold home calls for new strategy
If your home proves impossible to sell, there are still a few other options you might want to consider:

Price reduction. The most obvious recourse is to lower the price of your home until it attracts a buyer. If the proceeds of the sale aren't enough for you to pay off your mortgage, you may need to pay the deficiency in cash or sign a personal note to close the deal.

Time the market. If only one or two foreclosures are on the market, you might want to wait until those have been sold before you place your own home on the market as well. Ask a Realtor to tell you when the bank-owned property has been sold or you may notice that the for-sale sign has vanished and the home appears to be newly occupied.

Short sale. If you can't make your mortgage payments due to a genuine financial hardship that was not self-inflicted and you can't bring cash to closing, you may be able to negotiate a short sale in which your lender will forgive some of the debt that you owe.

Convert to rental. If you can handle the risks, hassles and headaches of being a landlord, you might want to take your home off the market and rent it to a tenant, perhaps with a lease-to-own agreement that could enable the tenant to purchase the home in the future.

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