Tuesday, November 3, 2015

Expired Listings

Many real estate investors like to look for expired listings, those properties that have not sold in this hot Seattle housing market. How to find the right one? Let's look at some stats.

614 listings expired on the NWMLS at the end of October. 98 were in King County; 33 were in Seattle.

11 of those in Seattle were rental listings. Of the remaining 22, five were condominiums. The median asking price of the remaining 17 expired Seattle listings was $600,000 for a four-bedroom, 2.5-bath house with 2460sf ($243.90/sf). The houses that sold in the past two weeks were priced lower at $549,500 for a more popular three-bedroom, two-bath size of 1850sf.

Only three of the five expireds in Seattle has three bedrooms, and only one of the five is owned free and clear. Eight of the 22 have a square footage within 500sf of the median size of the sold comps. Two of these are owned free and clear. One was priced over $700,000 and the other was just over $400,00.

Can you see how an investor, looking for free and clear property could quickly narrow down the list of possibilities? Pricing and location will make a difference to the offers on each. These two homeowners may or may not be willing to entertain a reasonable offer, but these are the ones that an investor might want to consider.

How would an offer be structured?

There might be several scenarios. Option one might be a full price offer without the seller having to pay real estate commissions, with 0% down and payments spread out in equal installments over thirty years. Option two might be a reduced price, with some small down payment, and the balance over thirty years. Option three might be a lower price, with a down payment and the balance with interest over thirty years. And the fourth option might be either all cash or a still-lower price amortized over thirty years.

Play around with it, and see what works for your Seller.

Happy Investing!

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