How Much are Sacramento County Short Sales / Bank Foreclosures Discounted?
I took a few minutes today to look at the discounts for short sales and foreclosures based simply on list prices. In other words — how much are they discounted before you negotiate with the seller?
Foreclosures may have a little more negotiating room between list price and sale price, but not as much as you may think. The reason is that homes that are priced well to begin with tend to get more competition, so even in the case of bank owned foreclosures, buyers typically only negotiate something between 5-6% off the list price for foreclosures, as compared to about 4% for all sales.
The real bulk of the discounts for foreclosures and short sales already appears in the MLS.
So with that, let’s look at the results. How much are foreclosures and short sales discounted in Sacramento County?
In active inventory, the list price for non-distressed sales are currently averaging $228.62 per square foot. Short sales are discounted, on average, 27.8%, with the average list price for short sales being $165.00 per square foot. Foreclosures are discounted even more — 36% compared to non-distressed sales — with the average REO in Sacramento County currently listed at $146.19 per square foot.
One caveat, however. If you look at short sales and foreclosures on a neighborhood by neighborhood basis, you generally see foreclosures still having better discounts than short sales — but the overall magnitude of the discounts are somewhat less than they are when you look at the entire county. This is because part of the 27.8% and 36% numbers reported above reflects the fact that in many cases more expensive areas also have fewer foreclosures.
In Antelope, for example, Short Sales are currently listed at a discount of 26.3%, and foreclosures are currently discounted 30%, from their non-distressed counterparts.
“Only” 30% off? That’s still not bad!
February 13th, 2008 at 7:08 am
I found your post very informative. I read on some blogs yesterday that discounted properties were actually bringing in higher prices as there begain a bidding war. When someone becomes emotional attached to the property and offers more.
I find the prices so much different here in Florida I have a family member buying custom home 3327 sq feet for 85 sq ft. I guess it’s all relative to home much people earn in each area but some of your quotes WOW seem high to someone moving from Florida.
February 21st, 2008 at 7:12 am
This is a great reason to hire a realtor as they can best guide you with this information to the best deal in your area. There are many pockets here as well were things are good and bad and homeowners will benefit from a realtor to work there way thru this grid of opportunities.