Hi folks. I had one of my Sellers email me earlier today needing an update on what is going on with her property. She's an absentee Seller and I could feel her frustration. She had been to my Poinciana website and noticed that I had just closed on a short sale that was similar in size to her house. Anyway, I'm sure many of you are getting these types of emails, so, I decided to post my response here, just in case it will help you with responding to your Sellers. The main thing, of course, is too just be honest. As a listing Broker, I can't control the market and I certainly don't take responsibility for it.
When I first listed this property we were within 5% of market value and have in fact had 2 offers on it that were turned down. So here's my response to my Seller.
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Thanks for your email. I did just close on a short sale property a couple of weeks ago. It was about the same size as yours but was a single story. It sold for $140,000 with the seller paying $8,400 towards the buyers closing costs for an effective selling price of $131,600.
We are getting some activity on your home but it is very sporadic. I have attached a market report showing how homes with at least 4 bedrooms, 2000 sq ft or more built no earlier than 2004 are doing in Poinciana since we placed yours on the market.
What it shows you is that there are currently 199 homes for sale that meet these parameters. The average home has 4 bedrooms 2,551 sq ft and is priced at $174,413 or $68.49 per sq ft. For reference yours is priced at $74.79 per sq ft.
There are 18 properties under contract(pending). These are on average 4 bedroom homes with 2,623 sq ft priced at $151,446 or $58.50 per sq ft.
There have been 52 sales since your house was placed on the market. These were 4 bedroom homes with 2,552 sq ft and sold for $160,917 or $64.30 per sq ft.
This shows me 2 things:
First, the homes that are selling (sold and pending) are larger than yours and are selling for less money per sq ft. The sales are at $64.30 and the pendings are at $58.50.
Secondly, this shows me that prices are still declining. That means that your house will be worth less tomorrow than it is today and less next week than it will be tomorrow.
The last time we discussed pricing was 4 July. At that time, the average price per sq ft was $66.00. Your house at that time was worth $141,000. Based on that figure a price reduction to $149,000 was suggested. You agreed to $159,000.
Based on today's price per sq ft the value of your house is $137,500. So the issue is still pricing.
Poinciana is averaging about 45 sales a month out of 1200 listings. That means that there is 26 months of inventory on the market. 83% of the sales are either bank owned properties (REOs) or short sales.
So, to answer your question, people are looking at the best priced properties out there. If they can find a bare basic house that is relatively new for $20,000 less than yours then that is what they are buying.
To compound our market difficulties, as of September 31st, Seller paid down payment assistance will no longer be allowed. This is a huge part of the market in Poinciana. FHA is also raising their minimum down payment from 3% to 3.5%. Mortgages are getting more and more difficult to get.
So what do you do?
Reduce it and sell it before it gets worse.
Rent it out.
Here is a link to my latest market report.
I hope this helps you to understand what's going on. I'll look forward to your thoughts. Please feel free to give me a call if you want to chat. END OF EMAIL
Folks, chasing a declining market downward is a losing proposition. What say you?
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