How to Sell your Home in the Daytona Beach Area: Competing with Bank-Owned Properties
The current Daytona Beach area real estate market has more listings and fewer buyers than we have seen in years. When you hear Realtors and newscasters say the “inventory is very high,” or “We have 3 years of inventory now,” it means there are lots of choices for buyers, and sellers have plenty of competition for those buyers.
Some of the homes for sale in Daytona and Ormond Beach are Bank Owned. When you want to sell your home in the Daytona Beach area, and a bank-owned property is your competition, you need to know how to effectively compete with it.
What is Bank-Owned Property?
A Bank Owned (or REO) property means that the former homeowner defaulted in payments, the lender foreclosed on the homeowner, and now the bank owns it. Banks are not in the business of “owning property,” they lend money. So, these homes are often “fire-sold” for less than market value.
In my market area here in Volusia County, a bank-owned property recently sold for almost $30,000 less than comparable homes. When you want or need to sell your property, and a bank-owned house is in your neighborhood, competing on price alone can be a huge challenge! However, there are ways to market your home competitively.
How to Compete?
Although it seems impossible to price your home as low as REOs, bank-owned properties are one of the easiest types of homes for sale in the Daytona Beach area to compete against.
Commission
Lenders usually offer a buyer agent commission close to 2.5%. In the current real estate market, many agents are not doing very well. If you offer a buyer agent 3% or higher, I guarantee more agents will go out of their way to show and sell your home to their buyers. Remember that home in my neighborhood I told you about, that sold below market value? It sat on the market for over a month, partly because of the low commission offered to a buyer's agent.
Incentives
Lenders negotiate from strength and a large portfolio – they have already spent $20,000-$40,000 on the foreclosure process. A bank is not likely to budge on terms, nor will they fix any inspection items. Turn this to your advantage. Offer incentives like a home warranty, paying for some or all buyer closing costs, or credit for new carpet. Being flexible and thinking of ways to entice a buyer can make all the difference.
Make a Good Impression and Stage your Home like a Model
Unfortunately for the previous owners, a bank-owned property is basically a repossessed home. Probably, the previous homeowners did not want to move, but were forced to move. Most bank-owned homes in Daytona Beach are vacant and in poor condition. If the earlier owners couldn’t pay their mortgage, then they most likely couldn’t keep up repairs either. They also may have taken out their frustrations on the property itself, and damaged the house intentionally.
To make your home show like a model:
Make sure it is clean
Make sure it is uncluttered
Make sure it is professionally staged
Staging is a relatively new profession, where interior designers help you prepare yourproprty to highlight its best features, and showcase the home for the public. More on this in a later blog.
Hire a Professional
Then, hire a specialist to market your home, a Realtor familiar with your area and your market. Make sure your Daytona Beach Area Realtor takes great pictures for the MLS and all the advertising. Many home buyers want a home they can move into without a lot of work, and will almost always choose a perfect home over a cheaper one. Remember, they have already seen plenty of bank-owned properties which need work! A professional agent will be able to point out some of those pitfalls and encourage a purchaser to make a reasonable offer.
I’ve had plenty of experience in helping buyers and sellers in this current market of distressed and troubled properties, and will be happy to answer any questions you have.