Selling a foreclosed property can be a smart move, but a difficult one to make. Most buyers these days are pickier and smarter. After all, they just want what is worth their hard-earned money. However, of course, this does not stop real estate agents from selling one. Why? It is because there is still a high market and a pool of money waiting up for grabs in the foreclosure real estate business.
Before jumping on the bandwagon, however, it is a must that you know what you are getting yourself into. You have to know the pros and cons involved with selling foreclosed properties, so that when clients bombard you with all the possible questions they have in mind, you are ready. This way, your success rate is higher.
Here are tips and ways on how to sell a foreclosed property:
Know how foreclosure works
This is probably the very first thing you have to research and know. Foreclosed assets are repossessed properties of banks when the previous owner wasn’t able to maintain his or her payments. Normally, banks sell foreclosed property either through a short sale or through foreclosure auctions, where they get a larger pool of clients to choose from.
Opportunity to Buy at Low Market Value
You have to make your client understand that banks are not into selling foreclosed properties, but they are only after the loaned amount incurred plus their foreclosure costs and other legal fees. Delivering this to the client in a way that makes it sound good will trigger their interest. For them, buying something 70% to 80% lower than the usually appraised value of a property is more than winning in the lottery. This should be your selling highlight pitch.
Divert the Topic of Repairs
Yes, most foreclosed properties are usually not in good shape. Therefore, your client may have to rethink because of the maintenance and repair cost they have to put up with. Before your client even mentions it, get a quote from a reputable contractor of how much the renovation costs will be if ever they purchase it, and add it to the selling price. If the total renovation cost still winds up lower than the actual market value, tell your client that this is still a great value for a “deal.”
Survey the Location and the Neighbourhood
Just as how fast foods “up-sell” their other products, you must also up-sell the other perks of the property. For instance, if it is near a hospital, it is important to consider how far is it from the city, if it is a safe place to live in, how are the neighbours like, etc. This also follows the rule that if the location is good, the market value of the property is also high. This means it has the potential of becoming a great business asset if they wish to sell it in the future.
There is no agent commission fee
Moreover, you can honestly disclose that you are not getting any commission from them. Sometimes, clients don’t want to go with the hassle of cutting their agent 3% to 5% slack off the property value. You have to explain that the banks will shoulder this; this way, they can concentrate on buying the asset.
You are likely to face stiff competition when selling foreclosed properties, as many real estate agents are also fully aware of the potential income they may gain. However, taking things up a notch higher by knowing and giving more than the competition has to offer will get you better sale success.
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