The current real estate chaos has introduced even the timid to the exotic avenues of unloading a home. Before, the industry experts were usually the only ones well-versed on REOs and foreclosure and short sales and even auctions. This generation of mortgage borrowers and homeowners has been, whether they liked it or not, put through a crash course on various "creative" methods of selling a property. Some have been personally involved in the paperwork-laden processes when delinquency was knocking on the door, while others have followed from the sidelines through media the often hair-raising developments. It has been for everyone a unique learning experience hard to forget anytime soon.
Southern Nevada - home to Summerlin, Mountains Edge, Spanish Trail, Henderson, North Las Vegas and Silverstone Ranch - is undeniably at the epicenter of the unusual sales method. What's intriguing about it all is how prices differ among them, as was reported by SalesTraq, a real estate information boutique.
In April SalesTraq counted 4,323 existing home closings in the Las Vegas housing market. Regular owner-initiated sales drew a median price of $135,000 on a volume of 1,383 units. REOs, or real estate owned by banks, brought $125,000 per home with 1,636 sales. Short sales, on the other hand, garnered the lowest median price at $122,000, with 969 closings. Based on these figures REOs, or mortgage lender foreclosures, and short sales in Southern Nevada lag about 8-10% behind the standard, untainted home sale.
Generally speaking, the owner-occupied property is kept in better condition and will deservedly attract top dollar. In foreclosures the mortgage bank often neglects maintenance and any needed repairs, which is glaringly evident today in many Las Vegas neighborhoods. The result understandably is a lower price point. Surprisingly short sales did even worse. The owner is still part of the whole process and for his own benefit should be looking after his house. The sooner the short sale gets done, the better he is off. And can go on about starting over. The psychological trauma of losing it may cause him to ignore some common sense steps he could take to expedite the sale. On the other hand, the label "short sale" may in itself drag down the price a buyer is willing to pay, no matter what shape the home is in.
Large mortgage lenders operating in Sin City predictably possess tens of REOs, a good number in any case. Enough to be called a portfolio. Since they are getting 8-10% less for them than well-maintained homes, wouldn't it make sense to spend some money on the upkeep to stay competitive? One or two properties wouldn't matter much, but a sizable inventory can add up to a significant bankroll they are now leaving on the table. Mortgage lenders are not in the property management business, they say, but it would be relatively straight forward to hire an outside company to look after what they have and make the most of it.