As has been discussed here countless times before, lender-mediated foreclosures and short sales are selling for lower prices than traditional properties. But what about those sales prices relative to the original asking price of the property when first listed? We decided to investigate.
Over the past few years, lender-mediated properties have consistently received less at sale relative to their original price than traditional properties. The price reductions made during the listing period are far more pronounced for these homes than they are with traditional "ma and pa" sellers. Check it:
|
|
Traditional |
Lender-Mediated |
|
Q1-2006 |
97.6% |
93.6% |
|
Q2-2006 |
97.8% |
93.5% |
|
Q3-2006 |
96.7% |
91.8% |
|
Q4-2006 |
95.6% |
90.4% |
|
Q1-2007 |
95.5% |
90.6% |
|
Q2-2007 |
96.2% |
91.0% |
|
Q3-2007 |
95.3% |
89.7% |
|
Q4-2007 |
93.4% |
87.2% |
|
Q1-2008 |
92.7% |
86.4% |
|
Q2-2008 |
93.6% |
88.4% |
|
Q3-2008 |
93.8% |
89.6% |
|
Q4-2008 |
92.5% |
88.9% |
Surprised? Probably not, I'd imagine, given what we know about the aggressive downward pricing that lenders are employing to move these depreciating assets from their bleeding financial statements.
What may surprise you is that the gap in these numbers between traditional and lender-mediated is starting to slowly shrink in Q2 and Q3 this year. Preliminary figures from Q4 confirm a continuation of this trend.
In other words, banks are beginning to bargain price their properties from the get-go in an attempt to spur buyer interest right away. Given the massive carrying costs associated with holding a portfolio of non-performing loans on your docket, this makes some sense. Take a look below at the way lender-mediated homes are creeping up in recent quarters relative to traditional. We'll be keeping an eye on this, of course:
Have you been turned down by other lenders?
Posted by: RamonGustav | August 23, 2010 at 11:16 PM