Destin Home Foreclosures - How Negotiable are the Banks?

There have been two great foreclosure opportunites come onto the market in Destin, FL in the past 10 days.  One was a nice beach front condominium and the other was a charming cottage within walking distance to the beach.  Both properties were bank owned and priced well below recent comparable sales.

For the past several months, almost every prospective buyer that I've spoken with has asked specifically for a list of bank owned properties.  Unfortunately, there isn't much of a list available because these properties typically contract quickly.  As a result, our strategy has been to identify potential neighborhoods and complexes with our buyers and wait for the next foreclosure or extremely motivated seller to appear.

At this point, our buyers have done their research, lined up financing, and are ready to pull the trigger on the right opportunity. 

Sounds good in theory, but as with most other things, the execution isn't as easy.  Specfically, buyers must be ready to make an agressive offer and most are unwilling to do so right now. For the two foreclosures mentioned above, we presented offers on both.  Both  were good (one at full price) but not good enough.  

Since the question....How much should we offer? always comes up, I decided to analyzye all Destin Home Foreclosures that have sold since April 1, 2009.  I was particulary interested to see what the relationship between list price, selling price, and days on market were.  The data is shown below: 

The data is sorted by Days on Market, from least to most. Days on market is the time between listing date and contract date.  Generally speaking, homes that go under contract the fastest usually indicate that the home was priced at or below market.

The data provides a few interesting observations:

• Every destin home foreclosure that was contracted within the first 14 days of listing sold at or above list price
• 56% of the homes closed within 5% or less of the list price.
• The average negotiation on properties listed less than 120 days was 4%
• The average negotiation on properties listed more than 120 days was 12%
• About 1/3 of foreclosures are listed more than 10% above the market

For buyers of foreclosed homes in Destin, you should:

• Expect to pay list or higher on a hot new foreclosure
• Think about your other alternatives before letting a good deal escape
• Wait 120 days if you want to make a low-ball offer

Some Destin foreclosures are priced below the market (hot deals) and other are priced above the market.  View all Destin Homes For Sale or call me on my direct line to understand which ones are priced right and which ones aren't.

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