While our region doesn’t have nearly the foreclosure problem that Florida, Nevada, Arizona and California are experiencing, we do have a substantial number of sellers who are struggling with delinquent mortgages and a growing number of foreclosure properties are coming onto the market.
At Ruhl&Ruhl, for example, we have 1,352 properties listed for sale. Of these, 71 are foreclosures, or 5.25% of our inventory. In addition, Ruhl&Ruhl is managing 88 properties that are in the foreclosure process but not yet listed for sale. So including those, foreclosures would account for 11.8% of our inventory. Further, we have 45 foreclosure properties currently pended, i.e. under contract to sell, but not yet closed. So foreclosures are definitely negatively impacting our prices and will do so increasingly, unless we can educate sellers to opt for short sales instead.
It behooves all parties – sellers, lenders, buyers and the public – to encourage deals to get together before some prices fall further this winter, and before homes go into foreclosure. We do not want our prices to drop 50% like they did in Florida and Nevada. According to Realty Trac, bank owned properties sold for an average of 35% less than non-foreclosure sales. Foreclosures not only absorb buyers, but also negatively impact the appraisals of the homes that surround them.
Short Sale Option
Sellers who are delinquent on their mortgage and anticipate they may need to sell their property for less than the mortgage amount should contact their mortgage lender as soon as possible to see if they can structure a “short sale” instead of going through foreclosure. It is far less costly than the foreclosure process, does less damage to the homeowner’s credit, and can be accomplished faster. The sooner sellers address this with their lender and Realtor, the better the options for the sellers. And short sales don’t sell at nearly as discounted a price as foreclosures, and therefore don’t hurt the neighborhood property values as much.
A family-owned company since 1862, Ruhl&Ruhl REALTORS annually sells nearly 3,800 homes in eastern Iowa, western Illinois and southwestern Wisconsin. Caroline Ruhl is the President and owner of Ruhl&Ruhl REALTORS, and is the fourth generation of the Ruhl family to lead the residential brokerage and home services company. Headquartered in Davenport, Iowa, the company has 250 sales associates and 50 employees based in sales offices located in Bettendorf, Cedar Rapids, Clinton, Coralville, Davenport, DeWitt, Dubuque, Maquoketa, and Muscatine, in Iowa, and in Moline, Illinois. In addition to residential sales, Ruhl&Ruhl offers services in relocation, new home sales, farm sales, senior services, real estate investment, property management and mortgage services through 1862 Mortgage. For more information on Ruhl&Ruhl, visit their website at www.RuhlHomes.com .
