When ‘not a short sale’ helps make the sale
In areas hit hard by the housing bubble, short sale signs are common. But if you live in one of those areas and you’re selling a nondistressed home, it may be to your advantage to specifically state in your listing that you’re not offering a short sale, according to a recent study that looked at 5,000 home sales in Boca Raton, Fla.
“Our findings speak to that particular local market, but I think you can extrapolate to other areas where we’ve seen a lot of distressed properties and foreclosures in the last few years,” says the study’s co-author, Ken H. Johnson, an associate professor at the Tibor and Sheila Hollo School of Real Estate at Florida International University in Miami. “What we found is that, in those affected areas, there is a short sale stigma.”
But isn’t ‘short sale’ a selling point?
The idea of a short sale stigma, says Johnson, is a little counterintuitive. After all, buyers should be on the hunt for deals, so theoretically, a short sale sign should help drive demand. But in areas with an abundance of distressed properties, Johnson’s data show that the opposite is true.
Properties listed as “not short sales” sold for 2 percent to 5 percent more than nondistressed properties without the designation, Johnson’s data show. The “not short sale” properties also spent less time on the market, selling about 10 percent to 15 percent faster than similarly situated properties.
The bottom line, says Johnson, is that if you’re selling a nondistressed property in an area with a high foreclosure rate, it’s a good idea to tell buyers that your home or condo isn’t a short sale.
Read more of ‘When ‘not a short sale’ helps make the sale’ by Yahoo! Singapore FinanceTags: College of Business, FIU, FIU College of Business, Florida International University, Ken H. Johnson, Media Coverage 2013, Tibor and Sheila Hollo School of Real Estate
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