Walter Burns
700 Grove Condominiums in Jersey City
I recently marketed 700 Grove Unit 7P in Jersey City which was a traditional sale. A traditional sale is your standard real estate transaction where you have two parties involved in deciding the sale, the buyer and the seller.
When we had Unit 7P on the market, the unit directly below it came on the market as a short-sale/pre-foreclosure sale (Unit 6P). A short-sale is where you have three or more parties involved in the transaction deciding the sale because the property is selling for less than the debt owed on it. These parties are the buyer, the seller, and the seller’s lender or lenders. Since the lenders are taking a loss, they have to decide how much of a loss, if any they are willing to take.
I was curious to see how both sales would play out. Would the short-sale (6P) sell at a great discount? Would having two identical units on the market at the same time affect value? Both condos closed within several weeks of each other. Here are the results.
700 Grove Unit 7p: 1 bedroom + den, 2 full baths, 1220 sq.ft. with 1 car parking listed for $465,000 & sold for $453,000 on 11/22/10. (Traditional sale)
700 Grove Unit 6P: 1 bedroom + den, 2 full baths, 1220 sq.ft. with 1 car parking listed for $425,000 & sold for $450,000 on 12/13/10. (Short-sale)
While there are many moving parts involved with a short-sale, these sales resonate what many lenders have been telling me. Banks are not giving away properties via short-sale like they were several years ago. They are monitoring the market closely for recent sales. It appears to me that the short-sale (6P) sold at market value. What do you think? Here are some other 700 Grove recent sales.
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Do you have any experience dealing with short sales personally? From what I read on the web, buying anything on short sale is a very time consuming process. So, I am a bit surprised to see that both the units sold for (almost) the same price.
I actually was shown both unit 6P and 7P. The short sale unit (6P) had several high end upgrades including, extra tile work in the bathroom, upgraded sinks, complete crown molding and custom lighting in several rooms. So while the short sale unit sold for $3k less then the traditional sale, the more desirable unit and the better value was still the short sale by far. This comparison of short sale and traditional sale is not apples to apples.
I actually just completed a short sale, and they are anything but. You wait and wait and they always inch the price up. I’d bet the person who bough the unit for 450 offered 420 or 415, the bank I’m sure countered and added in various payoffs for thing like unpaid condo fees, etc. Typically you’ll get a bit of a discount maybe 10%, typically 5%, never more than 20% and you’ll wait 6 months or longer, then they’ll want to close with 10 business days. Realistically unless you have time to waste short sales are a pain, the person buying this short sale didn’t do so well, the broker involved must not have been a real expert, because it looks like the buyer was eager. You really have to tell the bank no, and the listing broker really need to sell the bank on the numbers. My advice here is to only go for a short sale if the listing agent is certain they can get approval at a price you like and the agent must be VERY experienced in doing these transactions. Amateur hour is not what you need. If you are not finding such deals, which are few and far between, go for the regular transaction where 2 banks(including investors) have to sign off, a condo association need to be paid, etc are not going to cause heartache.
Also never try to buy a short sale from BOA, they might never respond.