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Phoenix Real Estate and Homes for Sale | Jonathan Dalton, Realty ONE Group – (602) 502-9693

Jonathan Dalton
REALTOR
ePro, SFR
602-502-9693

Do NOT Look at Phoenix Bank Owned Homes Without Reading This

Do NOT Look at Phoenix Bank Owned Homes Without Reading This

avatarthumbnail.jpgTo all of you who I have told over the past few months that bank owned homes in the Phoenix real estate market sell for about 95% of the list price, I owe you a sincere apology. My estimate was incorrect.

Phoenix bank owned homes actually sell for 96.5% of list price, or at least did in December 2008, according to Arizona Regional MLS data. (In keeping with my normal practice, I examined single family detached homes in Maricopa County only.)

In December 2008, at the height of the country’s economic crisis, 2,401 single family detached homes sold in Maricopa County:

  • Average original list price: $171,175
  • Average final list price: $151,398
  • Average sales price: $146,121
  • Average days on market: 55

The average sales price of 96.5% of the final sales price and 85.4% of the original list price set by the bank.

And this is important to know, especially if you’re expectation is to purchase a bank owned home for pennies on the dollar. While it’s possible – 11 of the 2,400 sales were at less than 50% of the final list price – it’s not particularly likely. Only 125 of the 2,400 sales were at less than 80% of the final list price.

“But that’s the final sales price,” you say. “What about the original?”

I’m glad you asked. Of the 2,401 closed sales in December, 1,795 were at sales prices at or above 80% of the original list price and 1,911 were at 75% or above. That’s 75 percent and 80 percent of all sales, respectively, for those keeping score and home. Those selling for less than 75% percent of the original list were on the market for 124 days compared to 39 days for the other 1,911.

What does this mean? In short, low balling the bank on an REO property – offering less than 80% of the list price – is a futile effort the majority of the time. And if you do choose to go well low of list price, you should do so expecting the bank to counter at a price closer to list.

Writing your “highest and best” offer at less than 80% of the bank’s list price will result in you not purchasing the home 75% of the time.

The math is just that simple.

(Editor’s note: I’ll have links to the data for the rest of 2008 within the next couple of days, though it will be on a password-protected page lest one of my colleagues in the area decide to make use of the data. Keep your eye out for the post that says the data’s ready.)

[tags]Phoenix real estate, Phoenix bank owned homes[/tags]

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