Monday, July 13, 2009

Athens Area Foreclosures; Buying from Banks vs “Bob"

Non-Foreclosure Sales Statistics
(565 listings) – 10-Jul-08 to 10-Jul-09 Athens GA






List Price






Selling Price











Foreclosure Sales Statistics (93 Listings) 10-Jul-08 to 10-Jul-09 Athens GA






List Price






Selling Price











It is truly amazing to me how just because a listing is branded with the words FORECLOSURE and BANK OWNED, that the media has painted, successfully too I might add, this pictures that everyone buying a bank owned home is getting a steal.


You hear of these urban legends that someone told you about how “Uncle Billy” bought a house for 50% of its’ value! To begin with, these fishing stories are all wrong. The premise, whether or not the particulars of the transaction are conveyed correctly, that “Uncle Billy” bought a home for less than full value cannot happen. Value or worth is what a party agrees to pay for a home. Not what the tax appraisal or a real estate agent says the house is worth.

If you paid $500,000 for your home, just because it has a tax appraisal of $900,000, doesn’t mean you could turn around and sell it for that much tomorrow. A home, your comic book collection, etc…is only worth what someone is willing to pay for it today. The reason there is perceived value in foreclosures is that idea that it “was worth” “X” amount more than I paid for it. Again, this thought goes back to “list price” or some phantom appraisal that was created for another party’s benefit.

Now with all of this said, please let the madness stop!! Regular homeowners just like you are trying to sell property too. They would love to have someone look at their homes. I have wondered recently if I put a sign rider on top of my real estate company sign that said FORECLOSURE RESALE, BANK OWNED, COME BEAT US UP, BLOOD IN THE WATER if a particular home would get shown more.

I am thinking so……


What the facts are however is that when you look at homes sold in Athens during the past twelve months that were non-foreclosure sales and you look at what Sellers got for their homes versus List Price the average Athens home seller walked away on an average and median basis with 95.27% and 96.22% respectively. How about bank owned foreclosures sales? They brought the bank an average and median price of 92.84% and 94.09% respectively off List Price. Banks aren’t giving away houses on the whole! Not in our market.

Now sure, bank owned foreclosure sales are providing a “little” bonus to buyers from these figures, but not the perceived 20%-50% that most people think they are getting in a foreclosure purchase. Does this 2 percent discount for buying a foreclosure make up for buying a home with no Seller Disclosure, no Warranties, and a home that is sold to you in an As-Is condition? I would contend no. The risk is too great for what small discounts are actually obtained in our market on the average.

The purpose of this post is to point out the frustration when I see a listing that is priced right for an owner, we will call him “Bob,” and in “Bob’s” area last month roughly 85% of homes sold or under contract were bank owned foreclosures. That is stiff competition! The sad thing is that of the homes that sold in his area (price range) which were bank owned sales, one was a multiple offer home that got bid up to 120% of List Price while on the other the buyer paid roughly 95% of List.

These homes in our area are not the bargains they are in FL, CA, NV, and other areas of the nation so the next time you go house hunting, put yourself in that seller’s shoes and consider a home that might be owned by a “Bob” and not a Bank. “Bob” might appreciate it and who knows, you might need a considerate buyer, like yourself, one day when you resale!

If you are a buyer in our market, these are probably the best buying conditions in 30 years! If you would like to search the Athens MLS with MapTracks please take a look at listings in our “Classic City” today! On this web MLS search solution you can search every listing on the Georgia MLS for the Greater Athens area or in your Georgia town!


all photos courtesy of the Athens Convention and Visitor’s Bureau

No comments:

Post a Comment