Don't Sell Yourself SHORT

For many in today’s economic climate, there is a perception that purchasing a “short sale” somehow equates with “deal of the century.” This is not always the case, especially in a “resort” area and second home market. In fact, with a healthy inventory and great selection of properties, most sellers who decide to list their property now, no matter what their situation, are prepared and willing to negotiate. A “short-sale” or “foreclosure” purchase, can take several months, and in many cases only impacts the psyche of the buyer, and not necessarily the wallet.

One of the most popular reasons a seller puts a property on the market based on my experience in working with sellers over the past 15+ years, is the desire to purchase a “replacement” property, which enables them to take advantage of being a “buyer” in this buyer’s market as well as the tax advantages associated with a 1031 exchange process. There are few short-sales in our resort area – those few over extended their equity in the property during the peak of the market. The bank is willing to take short the amount owed by the borrower, who may owe more than a comparable property listed for sale – while a seller who is not in default on the property, is simply pricing aggressively to be competitive with the supply.

In addition to other lien holders that the ‘short-sale seller’ may be in arrears with (i.e. homeowner associations/assessments, personal and real property taxes, utilities), there is a level of patience required on the part of the buyer. Once a “bid” is presented, the bank may take up to 30+ days for a response – if a response is given at all. The seller may also influence what the acceptance price will be, as they are still liable for any shortfalls in sales price and the amount owed to the lender. In the interim, as we see the lower priced properties, or low-hanging fruit, in the market get absorbed, the short-sale buyer can miss the market. This may not be true in Florida, Arizona, California and Nevada, but given the limited short-sale inventory, and availability of property at “distressed” pricing that doesn’t require short-sale negotiations here, a couple of sales in any segment can mean you missed the market.

In a buyer’s market, we recommend anyone looking to take advantage of these great opportunities to create a “wish list,” prioritizing their preferred location, type of property, and estimated “range” of pricing. Second, while not avoiding short-sales, look at comparable properties and price points, to avoid the often time consuming and frustrating process of a short sale, and potentially missing out on some very attractive interest rates or seller finance options. Finally, once the property of your choice is identified, don’t hesitate and make an OFFER.

An experienced and specialized real estate broker is your #1 resource for establishing what the best values are, and can best present offers to secure the best price possible. A savvy seller too, realizes this is a buyer’s market, and if they are truly interested in a sale, they will base their decision on motivation, inventory and competition, including those few “short sales” that may drive some on how they negotiate a bid on their property.

Exceptional opportunities exist right now – interest rates are at a 20 year low and areas like the resort community in and surrounding the ski area at Durango Mountain, are becoming more and more in demand. Our area has become increasing popular as a lifestyle choice for its alpine setting, views, location, weather, and affordability, especially when compared to other resort destinations in Colorado. Don’t find yourself saying “I shoulda bought in 2009!”… The long and the short of it…. THE TIME TO BUY IS NOW!